Dow Inc. · NYSE:DOW
Dow — Investor Day (May 2024)
108 slides from Dow's investor day presentation, May 16, 2024
Slide 1: Dow 2024 Investor Day Agenda
Exhibit 99.1 Dow 2024 Investor Day Agenda Clear Financial Advancing Value Executing Dow’s Path2Zero Priorities to Advance Growth Strategic Vision Value Growth Presentations Presentation Panel Discussion Presentation Jim Fitterling Packaging & Specialty Plastics Jim Fitterling Jeff Tate Karen S. Cart
Slide 2: Advancing Value Growth
Advancing Value Growth Jim Fitterling
Slide 3: What You Will See and Hear Today
What You Will See and Hear Today ▪ Delivering on our commitments while driving industry leadership ▪ Leveraging our advantaged portfolio for growth in attractive market verticals ▪ Maintaining our disciplined and balanced capital allocation priorities to maximize value growth ▪ Driving underlying ea
Slide 4: Driving Sustainable Growth and Enhancing Shareholder Value
Driving Sustainable Growth and Enhancing Shareholder Value ✓ Delivering on Our Commitments ▪ Leveraging Our Advantaged Portfolio for Growth ▪ Maintaining Our Disciplined and Balanced Capital Allocation ▪ Driving Underlying Earnings Growth ▪ Advancing Our Ambition Profitably
Slide 5: Delivering on Our Commitments Since Spin
Delivering on Our Commitments Since Spin 1 Cumulative FCF generation; average FCF Industry-leading cash flow generation ~$22B 2 yield is >2x the dividend yield since Spin Average CapEx as a percent of D&A; in line with our target to keep average CapEx Our Commitments: Disciplined and balanced capita
Slide 6: A Proven Playbook Across the Macroeconomic Cycle
A Proven Playbook Across the Macroeconomic Cycle Operational and Financial Discipline Robust Cash Generation Through the Cycle Investment-grade credit profile; ~$13B of Maintain strong financial flexibility committed liquidity including cash Operating $12.4 2 2 EBITDA ($B) Maximize cash flow ~80% ca
Slide 7: Driving Sustainable Growth and Enhancing Enterprise Value
Driving Sustainable Growth and Enhancing Enterprise Value ▪ Delivering on Our Commitments ✓ Leveraging Our Advantaged Portfolio for Growth ▪ Maintaining Our Disciplined and Balanced Capital Allocation ▪ Driving Underlying Earnings Growth ▪ Advancing Our Ambition Profitably
Slide 8: Industry Trends Enable >$800B Addressable Market by Mid-Decade
Industry Trends Enable >$800B Addressable Market by Mid-Decade Packaging Infrastructure PE Demand Growing ~1.2-1.4x GDP Global Inf rastructure and Construction Spend to Leading Positions 1 Market Verticals with Recy cled Demand >2x GDP Increase ~$2T by 2030 ~3% Packaging & Specialty Plastics 250-300
Slide 9: Global Scale in Attractive Market Verticals
Global Scale in Attractive Market Verticals 1 Reporting Segments & Business Units 2023 Net Sales by Area Key Differentiators ▪ Diverse product portfolio enables full-system solutions and unique go-to-market strategy Packaging & Specialty Plastics ▪ Proprietary technologies enable tailored solutions
Slide 10: Strategically Advantaged Feedstocks
Strategically Advantaged Feedstocks % of Dow The Americas Global Production Capacity USGC Feedstock Optimization $/BoE Oil-to-Gas Key Measure of Dow’s Feedstock Advantage Max Ethane & Propane Capabilities Spread 100% ▪ Dow’s portfolio of ethane-based crackers is Dow Industry advantaged vs. global na
Slide 11: Driving Sustainable Growth and Enhancing Enterprise Value
Driving Sustainable Growth and Enhancing Enterprise Value ▪ Delivering on Our Commitments ▪ Leveraging Our Advantaged Portfolio for Growth ✓ Maintaining Our Disciplined and Balanced Capital Allocation ▪ Driving Underlying Earnings Growth ▪ Advancing Our Ambition Profitably
Slide 12: Capital Allocation Priorities Drive Financial Flexibility
Capital Allocation Priorities Drive Financial Flexibility Capital Allocation Priorities Remain Consistent Enhanced Financial Flexibility ▪ Reduced net debt and pension liabilities by ~$9B Safely and reliably run our operations since Spin Organic investments with CapEx ≤D&A and ▪ No substantive debt
Slide 13: Disciplined Organic Growth Investments
Disciplined Organic Growth Investments Implementing Pipeline of High-Value Organic Growth Projects Focused Investments Across Our Portfolio ▪ On track to deliver >$3B/year in incremental earnings by 2030 and reduce Scope 1 & 2 emissions by ~15% vs. 2020 ▪ Near-term growth investments since 2021 have
Slide 14: Driving Sustainable Growth and Enhancing Enterprise Value
Driving Sustainable Growth and Enhancing Enterprise Value ▪ Delivering on Our Commitments ▪ Leveraging Our Advantaged Portfolio for Growth ▪ Maintaining Our Disciplined and Balanced Capital Allocation ✓ Driving Underlying Earnings Growth ▪ Advancing Our Ambition Profitably
Slide 15: Dow's Path2Zero Project Drives Profitable Growth and Decarbonization
Dow’s Path2Zero Project Drives Profitable Growth and Decarbonization Organic Growth Investments 45 Aligned with Decarbonization Roadmap 2005-2020 Dow ▪ Deliver higher-return, lower-risk, faster-payback growth CO e â 15% | Volume á ~30% 2 40 Current projects across our portfolio Today Emissions ▪ Inv
Slide 16: Fort Saskatchewan Path2Zero Project Execution
Fort Saskatchewan Path2Zero Project Execution 1 World’s First Cracker and Derivatives Complex with Net-Zero Emissions ▪ Fort Saskatchewan Path2Zero project CapEx of ~$6.5B; net cash deployment of ~$5B including cash and tax incentives 1Q23 Fluor - FEED partner ✓ ▪ Expect to add ~$1B EBITDA/year by 2
Slide 17: Driving Value Growth by Transforming Plastic Waste
Driving Value Growth by Transforming Plastic Waste Competitive Innovations and Technologies Value Chain Collaborations Differentiated Solutions Waste Collection Advanced and Mechanical Recycling Design for Recyclability and Bio-Based Feedstocks Collaborative global platform w ith customers and brand
Slide 18: Our Earnings Growth Levers
Our Earnings Growth Levers Incremental Earnings Enabled by 1 On Track to Deliver Increased Underlying EBITDA by >$3B/year by 2030 Growth Investments ▪ Since 2021, our grow th investments have added Peak ~$15B ~$800MM/year of incremental mid-cycle EBITDA ▪ Near-term grow th investments expected to de
Slide 19: Driving Sustainable Growth and Enhancing Enterprise Value
Driving Sustainable Growth and Enhancing Enterprise Value ▪ Delivering on Our Commitments ▪ Leveraging Our Advantaged Portfolio for Growth ▪ Maintaining Our Disciplined and Balanced Capital Allocation ▪ Driving Underlying Earnings Growth ✓ Advancing Our Ambition Profitably
Slide 20: Dow's Ambition Unlocks Value
Dow’s Ambition Unlocks Value AMBITION To be the most innovative, customer-centric, inclusive and sustainable materials science company in the world OUR AMBITION IN ACTION INNOVATIVE INCLUSIVE SUSTAINABLE CUSTOMER-CENTRIC ® Great Place To Work and FORTUNE Ov er 90% of Dow R&D Innov ation Commercializ
Slide 21: Dow: A Compelling Investment Opportunity
Dow: A Compelling Investment Opportunity SUSTAINABILITY- INCREASING INDUSTRY- ATTRACTIVE DISCIPLINED ... LEADING CASH SHAREHOLDER DRIVEN VALUE SHAREHOLDER CAPITAL REMUNERATION CREATION VALUE ALLOCATION GENERATION Strategically Maintain our assets to Returned ~90% of Reducing Scope 1 & 2 Top-quartile
Slide 22: Packaging & Specialty Plastics
Packaging & Specialty Plastics Karen S. Carter
Slide 23: Packaging & Specialty Plastics: A Formidable Franchise Driving Value Growth
P&SP consistently delivers strong financial results across the cycle, driven by our competitive advantages The market is growing while shifting toward circular and low-emission solutions, creating an opportunity for Packaging & Specialty value growth Plastics A Formidable Franchise Driving Our strat
Slide 24: Packaging & Specialty Plastics – Business Overview
Packaging & Specialty Plastics – Business Overview Track Record of Strong Financial Performance 2023 Financials and 3-Year Range Key Competitive Advantage Key Market Drivers $23.1B▪ Diverse portfolio of differentiated solutions >$350B Addressable Market ~1.3-1.5x GDP Growth ~$23.1B ~$29.3B Net Sales
Slide 25: A Strong Foundation of Competitive Advantage
A Strong Foundation of Competitive Advantage Low-Cost ▪ Global scale serving local markets ▪ Integrated sites maximizing productivity and operational excellence ▪ Cost-advantaged feedstocks 1 Geographically Cost Advantaged Our cost advantage vs. geographic averages allow us to w in globally Dow Posi
Slide 26: A Strong Foundation of Competitive Advantage
A Strong Foundation of Competitive Advantage Low-Cost Flexible ▪ Global scale serving local markets▪ Feedstock flexibility ▪ Integrated sites maximizing ▪ Innovative technology across our broad productivity and operational excellence process portfolio ▪ Cost advantaged feedstocks▪ Proprietary Soluti
Slide 27: A Strong Foundation of Competitive Advantage
A Strong Foundation of Competitive Advantage Low-Cost Flexible Differentiated ▪ Global scale serving local markets▪ Feedstock flexibility ▪ Product and catalyst innovation ▪ Integrated sites maximizing ▪ Innovative technology across our broad ▪ Deep industry, market and application productivity and
Slide 28: A Strong Foundation of Competitive Advantage
A Strong Foundation of Competitive Advantage Low-Cost Flexible Differentiated ▪ Global scale serving local markets▪ Feedstock flexibility ▪ Product and catalyst innovation ▪ Integrated sites maximizing ▪ Innovative technology across our broad ▪ Deep industry, market and application productivity and
Slide 29: Positioning for Growth in High-Value End Markets
Positioning for Growth in High-Value End Markets 1 Key End Markets Driving Growth Global Polyethylene Demand (MM MT) 3-6% Packaging ~3% 250-300 Actual Forecast 200-250 3-6% Hygiene & Medical ~4% 150-175 Consumer & 3-6% 130-135 Durable Goods ~120 4-6% Infrastructure 3-5% Mobility 2023 2025 2030 2040
Slide 30: Growth Shifting to Circular and Low-Emission Solutions
Growth Shifting to Circular and Low-Emission Solutions Global Polyethylene Demand (MM MT) ~3% Emerging Trends 250-300 Actual Forecast Circular Solutions 200-250 New and Evolving Regulations ~4% Low GHG 150-175 Changing Consumer Preferences Emissions and Brand Commitments 130-135 ~120 Waste as an Alt
Slide 31: Maximizing Value Through Key Strategic Actions
Maximizing Value Through Key Strategic Actions Strategic Actions 01 02 03 04 Deliver Invest to Transform the Decarbonize Breakthrough Grow Waste Innovation
Slide 32: Invest to Grow: Maximizing Returns Through the Cycle
1. INVEST TO GROW: Maximizing Returns Through the Cycle Focus Areas Key Actions Invest to Grow ▪ Increase feedstock flexibility to strengthen our low-cost advantage, Feedstock ▪ Expand LPG in Europe to enhance enabling profitable growth Flexibility feedstock flexibility, reducing cost ▪ Upgrade our
Slide 33: Decarbonize: World's First Net-Zero Scope 1 & 2 Emissions Complex
2. DECARBONIZE: World’s First Net-Zero Scope 1 & 2 Emissions Complex Leading the Industry in Decarbonization, with a First-Mover Advantage Invest to Grow 1 Top Brand CO Commitments Market Drivers Value Levers 2 Decarbonize 100% 25% Expands ethylene Growing Global and PE capacity Demand 40% 100% by 1
Slide 34: Transform the Waste: 3MM MTA of Circular and Renewable Solutions
3. TRANSFORM THE WASTE: 3MM MTA of Circular and Renewable Solutions Combining Strengths to Accelerate Impact Invest to Grow Top Brand Recycled Plastic Partnership Spotlight 1 Content Commitments Decarbonize 25% 50% Transform the Waste 25% 50% Forming End-to-End Circularity Partnership 25% Access to
Slide 35: Deliver Breakthrough Innovation: Enabling Our Competitive Advantage
4. DELIVER BREAKTHROUGH INNOVATION: Enabling Our Competitive Advantage Innovating to Meet the Value Chain’s Evolving Demands Invest to Grow Strategic Actions Highlights Decarbonize INNATE high- performance resins Transform the Waste Invest to increase PCR Grow incorporation and design Deliver Breakt
Slide 36: P&SP – A Formidable Franchise Driving Value Growth
P&SP – A Formidable Franchise Driving Value Growth Our Strategic Actions Will Deliver >$2B/year Incremental EBITDA by 2030 P&SP consistently delivers strong Implemented Growth financial results across the cycle, Investments Added Peak >$10B 1 ~$0.4B/year driven by our competitive (2021-2023) advanta
Slide 37: Industrial Intermediates & Infrastructure
II&I is a diverse and innovative derivatives portfolio that benefits from leading positions and global reach It is poised to take full advantage of the energy transition with more sustainable and efficient products across end markets Industrial Intermediates & Infrastructure Our strategic actions an
Slide 38: II&I – A Diverse and Higher-Value Derivatives Portfolio
II&I – A Diverse and Higher-Value Derivatives Portfolio Value Creation Through Integration and Market Participation II&I Segment Highlights ~$200B Addressable Market ~1.3-1.5x GDP Growth 2023 Financials and 3-Year Range # 1 Alkoxylates Energy $12.5B Americas ~$12.5B ~$16.9B Net Sales # 1 Amines Phar
Slide 39: Industrial Solutions
DRAFT Industrial Solutions Pankaj Gupta
Slide 40: Industrial Solutions: Well-Positioned to Capture Growth
Cost-advantaged and integrated portfolio upgrades and further diversifies ethylene footprint Serving attractive end markets with growth driven by energy transition, sustainability and digitalization Industrial Solutions Well-Positioned to Capture Growth Higher-return, lower-risk growth investments t
Slide 41: Industrial Solutions – Business Overview
Industrial Solutions – Business Overview Well-Positioned to Capture Growth 2023 Financials and 3-Year Range $4.2B ▪ World-leading producer of purified ethylene oxide and derivatives ~$4.2B ~$5.7B Net Sales ▪ Cost-advantaged and integrated portfolio $0.3B / 6% ▪ Strong customer relationships and ~$0.
Slide 42: Cost-Advantaged and Integrated Portfolio Upgrades and Further Diversifies Ethylene Footprint
Cost-Advantaged and Integrated Portfolio Upgrades and Further Diversifies Ethylene Footprint Higher Returns Advantaged Portfolio Attractive Applications ▪ Purified EO derivatives margins remain ▪ Cost-advantaged portfolio tilted to ▪ Market participation requires strong resilient; no significant add
Slide 43: Energy Transition, Sustainability and Digitalization Drive Earnings Growth
Energy Transition, Sustainability and Digitalization Drive Earnings Growth Emerging trends in end-markets growing faster than GDP ~$3B carbon capture Data Center ~$1B addressable ~$15B market by 2027 EV Batteries Carbon Capture Cooling solvents market by 2030 driven by AI, 5G and cloud market driven
Slide 44: Higher Return Investments to Deliver $175MM/Year of Mid-Cycle EBITDA
Higher Return Investments to Deliver $175MM/Year of Mid-Cycle EBITDA by Mid-Decade Increasing Alkoxylation Capacity by 70% Since Spin Through High-Value Investments ▪ Increased supply ~750 KTA Plaquemine EO Restart: availability and operating By end of 2Q24 rates in 2H24 ~550 KTA ~425 KTA ▪ Consumer
Slide 45: Industrial Solutions – Well-Positioned to Capture Growth
Industrial Solutions – Well-Positioned to Capture Growth Cost-advantaged and integrated portfolio upgrades and further diversifies ethylene footprint Serving attractive end markets with growth driven by energy transition, sustainability and digitalization Higher-return, lower-risk growth investments
Slide 46: Polyurethanes & Construction Chemicals
Polyurethanes & Construction Chemicals Jane Palmieri
Slide 47: Polyurethanes & Construction Chemicals: Focused Prioritization Throughout the Cycle
Relentless pursuit of efficiency and productivity Targeted capital investments in downstream capabilities for margin resiliency Innovation for sustainability as PU Polyurethanes & chemistries remain essential to the energy transition and decarbonization Construction Chemicals: Focused Prioritization
Slide 48: Polyurethanes & Construction Chemicals – Business Overview
Polyurethanes & Construction Chemicals – Business Overview Attractive End-Market Exposure Growing Greater than GDP 2023 Financials and 3-Year Range Application Highlight W hy Dow W ins $8.3B Appliances ~$11.7B Higher energy label ratings ~$8.3B Net Sales Consumer Furniture, Bedding, Mattresses Safer
Slide 49: Relentless Pursuit of Efficiency, Productivity and Improved Reliability
Relentless Pursuit of Efficiency, Productivity and Improved Reliability Optimizing Footprint Improving Efficiency ▪ Focusing participation on highest-returning PO derivatives across the globe Recent cost out Working capital enhancements - Reducing high-cost global PO capacity by ~25% through efforts
Slide 50: Targeted Capital Investments in Downstream Capabilities for Margin Resiliency
Targeted Capital Investments in Downstream Capabilities for Margin Resiliency Positioning Dow for growth when the recovery emerges across markets Improved MDI position with a more efficient world-scale distillation asset in Freeport, enabling exit from our LaPorte site Start-up Mid-2023 Strengthenin
Slide 51: PU Innovation Remains Essential to Decarbonization
PU Innovation Remains Essential to Decarbonization Mobility Consumer Construction Chemicals Automotive >$650MM 80 KTA $2B Roof Coatings Food and Fragrance Foam Systems addressable market total market in 2030 global liquid-applied technology market, grow ing >75% circularity on polyol ~$330MM at 4% C
Slide 52: Well-Positioned to Capture Recovery in Durables and Construction Demand
Well-Positioned to Capture Recovery in Durables and Construction Demand Inflation YoY 30Y Mortgage Rates and Home % Payments % Income Global 10 9 30 U.S. Past Recoveries Indicate Likely Coiled Spring 7.3 28 Home Payments % Income 8 8 26 30Y Mortgage Rate 7 24 5.6 6 22 ▪ Positive early demand signals
Slide 53: II&I – Positioned for Growth and Near-Term Cycle Upside
II&I – A Diverse and Higher-Value Derivatives Portfolio Positioned for Growth and Near-Term Cycle Upside II&I is a diverse and innovative derivatives portfolio that benefits from leading positions Implemented Growth and global reach with the following areas Investments Added 1 ~$150MM/year Peak ~$3.
Slide 54: Performance Materials & Coatings
World’s leading silicones and acrylics coatings franchises with cost- advantaged upstream integration Focused on attractive markets growing above GDP linked to secular trends in Performance Materials & mobility, electronics and sustainability Coatings Strategically Advantaged for Growth Structural a
Slide 55: PM&C – Strategically Advantaged for Growth
PM&C – Strategically Advantaged for Growth 2023 Financials and 3-Year Range Performance Materials & Coatings Segment $8.5B Net Sales ~$10.8B ~$8.5B $0.2B / 3% ~$0.2B ~$1.3B Op. EBIT/Op. EBIT (%) ~3% ~12% $1B / 12% ~$1.0B ~$2.1B Op. EBITDA/Op. EBITDA (%) ~12% ~20% Asia Pacific EMEAI Net Key Different
Slide 56: Coatings & Performance Monomers
Coatings & Performance Monomers Joanne Sekella
Slide 57: Coatings & Performance Monomers: Industry-leading Acrylic Coatings Franchise
Leading global positions in acrylic binders and waterborne additives Commercial and operational excellence through capital discipline and purposeful asset management Coatings & Performance Monomers Industry-leading Acrylic Coatings Franchise Well-positioned to grow earnings as housing market recover
Slide 58: Coatings & Performance Monomers – Business Overview
Coatings & Performance Monomers – Business Overview 2023 Financials and 3-Year Range Key Market Drivers Why Dow Wins $3.3B Enabling Growth 1-1.5X Global GDP ~70% captive Global footprint in monomers demand target markets ~$3.3B ~$4.1B Net Sales ▪ Existing home sales, new home builds $0.1B / 2% ▪ Low
Slide 59: Architectural Coatings Leadership, Cost Discipline Accelerate Growth
Architectural Coatings Leadership, Cost Discipline Accelerate Growth Paint Solutions = ~2/3 of Business Partnerships with Leading Brands Evolving Market Landscape AkzoNobel Water ▪ Supply of existing home sales and new home builds Asian Paints Pigment and primary drivers for paint demand Behr Benjam
Slide 60: Targeted Innovation and Capital Investment for Growth
Targeted Innovation and Capital Investment for Growth Pavement Markings Paper Packaging Industry Trends RHOBARR 99% Driver safety and Autonomous vehicle Barrier Paper Fiber compatibility regulatory compliance Recovery Coatings ▪ 65-70% thinner water- Easy application/quick-dry Durability based barri
Slide 61: Industry-Leading Acrylic Coatings Franchise
Industry-Leading Acrylic Coatings Franchise Strategic Targeted Commercial and Operational Sustainable Chemistries Relationships Innovation Excellence Broad suite of sustainable Leveraging partnerships with Capital and cost discipline chemistries to meet leading global brand owners to and purposeful
Slide 62: Consumer Solutions
DRAFT Consumer Solutions Brendy Lange
Slide 63: Consumer Solutions: World-Leading Silicones Franchise
Industry-leading scale and integration combined with a best-in-class downstream portfolio drive customer- centered innovation Increasing demand for silicones as essential materials in attractive end Consumer Solutions markets growing above 1.5X GDP World-Leading Silicones Franchise Well-Positioned f
Slide 64: Consumer Solutions – Business Overview
Consumer Solutions – Business Overview 2023 Financials and 3-Year Range Why Dow Wins $5.2B World-class silicones franchise Si Global footprint in target markets ~$5.2B Net Sales ~$6.7B $0.1B / 3% In-depth market and industry Captive sustainable silicon metal ~$0.1B ~$1.1B expertise Op. EBIT/Op. EBIT
Slide 65: Competitively Advantaged for Sustainable Earnings Growth
Competitively Advantaged for Sustainable Earnings Growth 1 Largest Silicones Producer with Global Reach and Seat at the Design Table Industry-Leading Back-Integration ▪ Averages ~2 new product launches per week ▪ Low cost and supply ▪ The only producer with reliability world-scale siloxanes faciliti
Slide 66: Broad Portfolio to Meet Increasing Demand for Silicones in Light Vehicles
Broad Portfolio to Meet Increasing Demand for Silicones in Light Vehicles Increased Silicone Value in Industry Trends Global Light Vehicle Production Our Value Proposition Light Vehicle Applications Light Vehicle Production Silicone Value in Outgrow ing Light CAGR 1.3% Lightweight Light Vehicle Appl
Slide 67: Expanding Growth Through Innovation for a Connected World
Expanding Growth Through Innovation for a Connected World Our Value Proposition Industry Trends Data Centers and AR/VR Driving Electronics Recovery Growth Driven by Innovation and Performance STABLE Silicone Thermal Enhanced Soaring high-speed computing Management Materials to dissipate 9% Product (
Slide 68: Capturing Silicone Demand Driven by Sustainability in Building & Infrastructure
Capturing Silicone Demand Driven by Sustainability in Building & Infrastructure Increased Silicone Value in Industry Trends Zero-Carbon Buildings Our Value Proposition Construction Market Global Construction Spending Specialty Silicone Zero-Carbon Buildings to Reach 16%-25% 50+ years of expertise Us
Slide 69: Focused Capital Investment Unlocking High-Value Downstream Growth
Focused Capital Investment Unlocking High-Value Downstream Growth Higher-Return, Faster-Payback Growth Capital Projects Fast-Growing Markets 2021-2023 2024-2026 $10B $12B $10B >2X GDP Building & >2X GDP Consumer & >2.5X GDP Mobility Infrastructure Electronics ~$300 MM Richer Product Mix ~$230 MM ~$2
Slide 70: PM&C – Strategically Advantaged for Growth
PM&C – Strategically Advantaged for Growth Strategic Areas of Focus Earnings at Cycle Bottom, Returning to Growth Trajectory Implemented Growth Investments Added 1 ~$250MM/year Peak ~$2.4B (2021-2023) Focus on Attractive Capitalize on ~$500MM Peak ~$2.1B ~$300MM Mid-cycle Markets and Higher-Return G
Slide 71: MobilityScience
MobilityScience~ Jon Penrice
Slide 72: Mobility Is an Attractive Growth Opportunity
Mobility Is an Attractive Growth Opportunity Global Light Vehicle Production Key Trends Driving Change in Mobility 100 90 80 Electrification Up to 300% increase 22% 70 in Dow product demand 60 for BEV and Hybrid Automotive OEM Back 50 Integration 40 6% 30 Total Addressable $75B 20 Market Circularity
Slide 73: Dow's Path2Zero
Dow’s Path2Zero Jim Fitterling, Dan Futter, John Sampson
Slide 74: Growing Earnings and Navigating the Climate and Energy Transition
Growing Earnings and Navigating the Climate and Energy Transition ▪ Enables a high-value portfolio of low- emissions products at differentiated pricing Uniquely ▪ Deepens partnerships with customers to Our Approach to Decarbonize & Grow Positioned to support their decarbonization journey Win with Di
Slide 75: Ft. Saskatchewan Path2Zero Builds on TX-9's World-Class Performance
Ft. Saskatchewan Path2Zero Builds on TX-9’s World-Class Performance Performance Comparison of Global Cracker P2Z Project Enhances Our Cost-Advantaged Footprint and 1 New Builds 2017-2022 Adds Zero-Emissions Capacity ▪ Demonstrated ~20% lower capital cost per ton and >65% lower Dow’s Ethylene Footpri
Slide 76: Low-Emissions Market Opportunities and Supply/Demand Dynamics
Low-Emissions Market Opportunities and Supply/Demand Dynamics Market Relative Consumption Volume Opportunity Willingness to Pay Per Tonne of Emissions by Market Pilots and Business Models > >$ $1 100 00 /ton /T $50 $50 -1 -1 00 0/ton 0/T <$ <5 $0 5/ton 0/T ▪ 60% of largest 100 Consumer Initial sales
Slide 77: A Strategic Investment with Key Value Drivers
A Strategic Investment with Key Value Drivers Driving Efficiency in Construction and The Alberta Feedstock Advantage Engineering to Derisk Investment ▪ Low er capital intensity vs. TX-9 including Fluor - FEED partner 1Q23 decarbonization assets ✓ ▪ Leveraging 3rd party investments to reduce Dow’s Li
Slide 78: Clear Financial Priorities to Advance Value Growth
DRAFT Clear Financial Priorities to Advance Value Growth Jeff Tate
Slide 79: Clear Financial Priorities to Advance Value Growth
Clear Financial Priorities to Advance Value Growth Demonstrate Execute Growth Maintain the Continued Levers and Increase Financial Flexibility Shareholder Operational and We Have Built Returns Financial Discipline
Slide 80: Clear Financial Priorities to Advance Value Growth
Clear Financial Priorities to Advance Value Growth Demonstrate Execute Growth Maintain the Continued Levers and Increase Financial Flexibility Shareholder Operational and We Have Built Returns Financial Discipline
Slide 81: Capital Allocation Framework Remains Consistent
Capital Allocation Framework Remains Consistent Safely and Reliably Running Our Operations Credit Profile Organic Investments Dividend Policy Share Repurchases ▪ Maintain strong ▪ Maintain CapEx ≤D&A ▪ Long-term dividend ▪ Share repurchases and investment-grade credit over the economic cycle payout
Slide 82: Disciplined Delivery on the Targets We Outlined at 2021 Investor Day
Disciplined Delivery on the Targets We Outlined at 2021 Investor Day Disciplined and Balanced Capital Allocation 1 ✓ Returned ~83% of operating net income to shareholders Target returns of 65% of operating net income ✓ Strongest balance sheet in four decades ✓ Added ~$0.8B mid-cycle EBITDA since 202
Slide 83: Strong Balance Sheet and Credit Profile
Strong Balance Sheet and Credit Profile No Substantive Debt Maturities Until 2027 Strategic Actions to Strengthen Credit Profile $1.2B $0.7B ▪ Strong investment-grade profile (Baa1, BBB+, BBB) $0.5B $0.1B $0.1B ▪ ~99% of all long-term debt at a fixed rate; average cost of debt of ~5.2% 2024 2025 202
Slide 84: Clear Financial Priorities to Advance Value Growth
Clear Financial Priorities to Advance Value Growth Demonstrate Execute Growth Maintain the Continued Levers and Increase Financial Flexibility Shareholder Operational and We Have Built Returns Financial Discipline
Slide 85: Maintaining a Disciplined Low Cost-to-Serve Mindset
Maintaining a Disciplined Low Cost-to-Serve Mindset Lowering Our Cost Structure Digitally Enabled Operational Improvements ▪ Increase in sales via digital channels: from 20% at 2023 SG&A + R&D (% of Sales) the beginning of 2020 to 39% at the end of 2023 ▪ Customer order touches reduced by >20% Peer
Slide 86: Disciplined Capital Investments to Drive Improved Returns
Disciplined Capital Investments to Drive Improved Returns CapEx Expected to Ramp to ~$3B in 2024 and Exceed D&A in 2024-2027 Cash and Tax ▪ Net CapEx of ~$5B, including benefit <$50MM >$100MM/year >$300MM/year Incentives Ft. Saskatchewan of >$1.5B in cash and tax incentives Net CapEx Path2Zero ▪ Exp
Slide 87: Enhancing Our Financial Position Through Focused Cash Flow Generation
Enhancing Our Financial Position Through Focused Cash Flow Generation Top-Quartile Cash Conversion in the Industry Maintaining Strong Cash Conversion 1 Across the Cycle 2019-2023 Cash Flow Conversion (% of EBITDA) 82% CFFO to ~82% avg. EBITDA (%) 1 conversion Peer 1 DOW Peer 2 Peer 3 Peer 4 Peer 5 P
Slide 88: Clear Financial Priorities to Advance Value Growth
Clear Financial Priorities to Advance Value Growth Demonstrate Execute Growth Maintain the Continued Levers and Increase Financial Flexibility Shareholder Operational and We Have Built Returns Financial Discipline
Slide 89: Near-Term Growth Investments to Deliver Higher Returns Over the Cycle
Near-Term Growth Investments to Deliver Higher Returns Over the Cycle Investing in Higher-Return, Lower-Risk Projects … and Executing Actions that Maximize Returns Return 28% (%) Silicones Growth Coatings Capacity 27% Amines Growth Adding ~$2B/year in mid-cycle EBITDA by mid-decade 2023 Expansion 26
Slide 90: Fort Saskatchewan Path2Zero Project to Add $1B/Year in Mid-Term EBITDA
Fort Saskatchewan Path2Zero Project to Add $1B/Year in Mid-Term EBITDA 1 World’s First Cracker and Derivatives Complex with Net-Zero Emissions ▪ Fort Saskatchewan Path2Zero project CapEx of ~$6.5B; net cash deployment of ~$5B including cash and tax incentives 1Q23 Fluor - FEED partner ✓ ▪ Expect to
Slide 91: Circular Innovations to Grow Long-Term EBITDA >$500MM/Year by 2030
MM MTA Circular Innovations to Grow Long-Term EBITDA >$500MM/Year by 2030 Value Chain Collaborations On Track to Commercialize ~3MM MTA of Circular Solutions by 2030 Waste Collection Advanced and Mechanical Recycling and Bio-Based Feedstocks Mechanical Recycling Advanced Recycling Bio-Based Solution
Slide 92: On Track to Deliver >$3B/Year in Underlying EBITDA Growth by 2030
On Track to Deliver >$3B/Year in Underlying EBITDA Growth by 2030 High-Value Growth Investments Drive Incremental Earnings Growth Levers Mitigating Peak ~$15B Structural Macro Headwinds ▪ Implemented ~$800MM/year of Peak >$12B >$0.5B M id-cycle growth investments since 2021 ~$1.0B Implemented Growth
Slide 93: Financial Flexibility to Drive Leading Shareholder Returns
Financial Flexibility to Drive Leading Shareholder Returns Cash Generation Drives Increased Shareholder Returns Growth, Enabled by Strong Balance Sheet and Liquidity Additional Shareholder Value ▪ Grow the dividend as earnings and FCF expands Share Repurchases▪ Execute share repurchases as earnings
Slide 94: Dow: A Compelling Investment Opportunity
Dow: A Compelling Investment Opportunity Our Financial Targets Proven Operational Playbook ▪ Deliver >$3B/year in underlying EBITDA growth by 2030 ▪ Maintain industry-leading cash generation Demonstrate Execute Growth ▪ Operating ROIC target >13% across the cycle Maintain the Continued Levers and In
Slide 95: Appendix
APPENDIX
Slide 96: Reconciliation of Net Income to Operating EBIT and Operating EBITDA
Reconciliation of Net Income to Operating EBIT and Operating EBITDA Reconciliation of Net income to Operating EBIT and Twelve Months Ended Operating EBITDA In millions (Unaudited) Dec 31, 2020 Dec 31, 2021 Dec 31, 2022 Dec 31, 2023 Net income $ 1,294 $ 6,405 $ 4,640 $ 660 + Provision (credit) for in
Slide 97: Reconciliation of Loss from Continuing Operations to Pro Forma Operating EBIT and EBITDA
Reconciliation of Loss from Continuing Operations, net of tax to Pro Forma Operating EBIT and Pro Forma Operating EBITDA Reconciliation of Loss from Continuing Operations, net of tax to Pro Forma Operating EBIT Twelve Months Ended and Pro Forma Operating EBITDA In millions (Unaudited) Dec 31, 2019 L
Slide 98: Segment Information
Segment Information Net Sales by Segment Twelve Months Ended In millions (Unaudited) Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Packaging & Specialty Plastics $ 23,149 $ 29,260 $ 28,128 Industrial Intermediates & Infrastructure 12,538 16,606 16,851 Performance Materials & Coatings 8,497 10,764 9,672 Cor
Slide 99: Segment Information (continued)
Segment Information (continued) Operating EBITDA by Segment Twelve Months Ended In millions (Unaudited) Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Packaging & Specialty Plastics $ 3,985 $ 5,506 $ 7,996 Industrial Intermediates & Infrastructure 648 1,968 2,894 Performance Materials & Coatings 997 2,117 1
Slide 100: Cash Conversion and Free Cash Flow Reconciliation
Cash Conversion and Free Cash Flow Reconciliation Reconciliation of Cash Flow Conversion Three Months Ended Twelve Months Ended In millions (Unaudited) Mar 31, 2019 Jun 30, 2019 Sep 30, 2019 Dec 31, 2019 Mar 31, 2024 Dec 31, 2019 Dec 31, 2020 Dec 31, 2021 Dec 31, 2022 Dec 31, 2023 Cash provided by o
Slide 101: Cash Conversion and Free Cash Flow Reconciliation (continued)
Cash Conversion and Free Cash Flow Reconciliation (continued) Reconciliation of Cash Flow Conversion Three Months Ended In millions (Unaudited) Mar 31, 2022 Mar 31, 2023 Mar 31, 2024 Cash provided by operating activities - continuing operations (GAAP) $ 1,612 $ 531 $ 460 Cash provided by operating a
Slide 102: 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) Mar 31, 2024 Dec 31, 2023 Mar 31, 2023 Mar 31, 2022 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Net income (loss) available for Dow Inc. common s
Slide 103: Reconciliation of Net Debt
Reconciliation of Net Debt Reconciliation of Net Debt In millions (Unaudited) Mar 31, 2024 Dec 31, 2023 Dec 31, 2021 Mar 31, 2019 Notes payable $ 55 $ 62 $ 161 $ 295 Long-term debt due within one year 118 117 231 2,367 Long-term debt 16,170 14,907 14,280 17,158 Gross debt (GAAP) $ 16,343 $ 15,086 $
Slide 104: Operating Net Income Returned to Shareholders
Operating Net Income Returned to Shareholders Operating Net Income Returned to Shareholders Three Months Ended Twelve Months Ended In millions (Unaudited) Jun 30, 2019 Sep 30, 2019 Dec 31, 2019 Mar 31, 2024 Dec 31, 2020 Dec 31, 2021 Dec 31, 2022 Dec 31, 2023 Net income (loss) available for Dow Inc.
Slide 105: Operating Net Income Returned to Shareholders (continued)
Operating Net Income Returned to Shareholders (continued) Operating Net Income Returned to Shareholders Three Months Ended In millions (Unaudited) Mar 31, 2022 Mar 31, 2023 Mar 31, 2024 Net income (loss) available for Dow Inc. common stockholders (GAAP) $ 1,569 $ (93) $ 516 - Significant items, afte
Slide 106: 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 thereaf ter, T
Slide 107: Safe Harbor Cautionary Statement about Forward-Looking Statements
Safe Harbor Cautionary Statement about Forward-Looking Statements Certain statements in this presentation are “f orward-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 A
Slide 108: Non-GAAP & Definitions
Non-GAAP & 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 segments, including alloca