Investor Day 2024
Dow 2024 Investor Day Agenda
Advancing Value | Executing |
Growth | Strategic Vision |
Clear Financial | |
Dow's Path2Zero | Priorities to Advance |
Value Growth |
Presentation
Jim Fitterling
Chair and CEO
Presentations
Packaging & Specialty Plastics
Karen S. Carter
President, P&SP
Industrial Intermediates & Infrastructure
Jane Palmieri
President, II&I
Pankaj Gupta
Vice President, Industrial Solutions
Performance Materials & Coatings
Brendy Lange
President, PM&C
Joanne Sekella
Vice President, Coatings & Performance Monomers
MobilityScience
Jon Penrice
President, MobilityScience
Panel Discussion | Presentation |
Jim Fitterling | Jeff Tate |
Chair and CEO | CFO |
John Sampson | |
Senior VP, Operations, | |
Manufacturing & Engineering | |
Dan Futter | |
Chief Commercial Officer |
Advancing Value Growth
Jim Fitterling
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 earnings growth by transforming and optimizing how we meet our customers' needs
- Advancing our ambition profitably with transparency and accountability
Dow is well-positioned to deliver long-term sustainable growth and enhance 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
Delivering on Our Commitments Since Spin
Our Commitments:
- Balanced capital allocation to maximize shareholder value
- Financial and operational discipline through the economic cycle
- Best-ownermindset
- Driving sustainability leadership in our industry
- Culture of benchmarking and enhanced transparency
Industry-leading cash flow generation | ~$22B | Cumulative FCF1 generation; average FCF |
yield is >2x the dividend yield since Spin2 | ||
Average CapEx as a percent of D&A; in | ||
Disciplined and balanced capital allocation | ~65% line with our target to keep average CapEx | |
at or below D&A over the cycle | ||
Low-risk profitable growth | ~12% | Average Operating ROIC1 between |
2019-2023; above WACC of 10% | ||
Operating net income1 returned; | ||
Attractive shareholder remuneration | ~90% reduced share count by >45MM shares | |
Strong credit profile across the cycle | ~$9B | Reduction in net debt1 and underfunded |
pension liabilities since Spin | ||
Robust organic growth investments | ~$0.8B | Mid-cycle EBITDA impact from near- |
term growth investments | ||
>$0.9B | Cash from select infrastructure | |
Best-owner mindset | divestiture in 2020; >$1B additional | |
expected in 2024 | ||
- See appendix for definition of Non-GAAP measures
- Since Spin: April 1, 2019 through 1Q24
A Proven Playbook Across the Macroeconomic Cycle
Robust Cash Generation Through the Cycle
Operational and Financial Discipline
$7.3
$5.7
$5.6
$6.3
$12.4
$7.1
$9.3
$7.5
Operating
EBITDA2 ($B)
CFFO
($B)
$5.4
$5.2
Maintain strong financial flexibility | Investment-grade credit profile; ~$13B of |
committed liquidity including cash | |
Maximize cash flow | ~80% cash flow conversion2 since Spin |
Maintain cost discipline | $1B cost savings actions in 2023 |
Lowered cash commitments | Reduced by ~$1B; including lower share count, |
interest, pension and JV cash contributions | |
Capturing Value Growth | |
Advance disciplined organic growth | Investments to drive >$3B/year in underlying |
earnings growth | |
Leverage strategically advantaged | Positioning and flexibility are key differentiators |
feedstocks | |
2019 | 2020 | 2021 | 2022 | 2023 |
Global
GDP Growth ~2.6% ~(3.0)% ~6.2% ~3.0% ~2.7%
Rate (%)1
Capitalize on presence in attractive | Global scale and diverse product portfolio to |
end markets | capitalize on market trends growing >GDP |
Innovate with our materials science | >1,000 new innovative products commercialized |
expertise | in 2023 |
- S&P Global
- See appendix for definition of Non-GAAP measures
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
Industry Trends Enable >$800B Addressable Market by Mid-Decade
Market Verticals1
Packaging
~30%
Infrastructure
~40%
Consumer
~20%
Mobility
~10%
Packaging | Infrastructure |
PE Demand Growing ~1.2-1.4x GDP | Global Infrastructure and Construction Spend to |
with Recycled Demand >2x GDP | Increase ~$2T by 2030 |
Actual | Forecast | ~3% | 250-300 | Circular | Transportation | $0.8 | |
200-250 | Solutions | Residential | $0.7 | ||||
~4% | 150-175 | Low GHG | Energy | $0.3 | |||
~120 | 130-135 | Emissions | Commercial | $0.3 | |||
& Offices | |||||||
Conventional | Water | $0.2 | |||||
Other Non- | |||||||
$0.2 | |||||||
Residential | |||||||
2023A | 2025E | 2030E | 2040E | 2050E | Industrial | $0.1 | |
Volumes in MM of MT |
Source: OECD, Nexant, S&P Global, IEA, Industry interviews, Dow internal | Source: S&P Global |
analysis; assumes 2.5% global GDP growth 2023-2050 |
Consumer | Mobility | ||||||||||||||
Spending Growing at ~4% CAGR | Global EV Demand Driving | ||||||||||||||
Supported by Rising Middle Class | Light Vehicle Production Growth | ||||||||||||||
~$80T | |||||||||||||||
5.4 | 90 | 92 | 97 | ||||||||||||
~$60T | |||||||||||||||
4.6 | |||||||||||||||
4.2 | 48 | ||||||||||||||
15 | 24 | ||||||||||||||
2023 | 2025 | 2030 | |||||||||||||
2023 | 2025 | 2030 | |||||||||||||
Middle-Class Population (B) | Light Vehicle (MM units) | BEV & PHEV (MM units) | |||||||||||||
Total Consumer Spending($ T) | |||||||||||||||
Source: S&P Global - Mobility | |||||||||||||||
Sources: Statista; Dow internal analysis |
Leading Positions
Packaging & Specialty Plastics
#1 High-Pressure Technology
Capacity Including LD, EVA,
Ionomers, Acid Copolymer
#3 Total Ethylene and PE
Industrial Solutions
#1 Purified Ethylene Oxide
#1 Ethylene Amines
#1 Ethanol Amines
Polyurethanes
#1 Propylene Oxide
#1 Propylene Glycol
#1 Polyols
Consumer Solutions
#1 Silicones
Coatings & Monomers
#1 Acrylic Binders
#1 Waterborne Additives
1.Average 2021-2023 % of Total Dow Revenue excluding Corporate and Hydrocarbons & Energy
Global Scale in Attractive Market Verticals
Reporting Segments & Business Units | 2023 Net Sales by Area1 | Key Differentiators |
Feedstock and Site Integration
Packaging & Specialty Plastics
Packaging and Specialty | Hydrocarbons & Energy | |||
Plastics | ||||
Industrial Intermediates &
Infrastructure
Polyurethanes & | Industrial Solutions | |||
Construction Chemicals | ||||
Performance Materials & Coatings
Consumer Solutions | Coatings & Performance | |
Monomers | ||
▪ Diverse product portfolio enables full-system | ||||||||||||
solutions and unique go-to-market strategy | ||||||||||||
~$23.1B | ▪ Proprietary technologies enable tailored solutions | |||||||||||
▪ Breakthrough upstream innovation (i.e., FCDh, EDH, | ||||||||||||
e-cracking) | ||||||||||||
▪ World-leadingpurified EO capacity to capture growth | ||||||||||||
~$12.5B | in pharma, cleaning and energy | |||||||||||
▪ | PU chemistry reduces emissions in electric vehicles | |||||||||||
and improves energy efficiency in building and | ||||||||||||
construction | ||||||||||||
▪ Robust innovation pipeline and application expertise | ||||||||||||
~$8.5B | ▪ Differentiated silicones applications for electronics, | |||||||||||
mobility and personal care end markets | ||||||||||||
▪ Broad sustainability toolkit enables next-gencoatings | ||||||||||||
solutions | ||||||||||||
U.S. and Canada | LAA | EMEAI | APAC | ▪ World-scaleassets with upstream integration | ||||||||
Net Sales | Employees | Manufacturing Sites | Global Reach | ||||
2023 | ~$45B | ~35,900 | 98 | 31 countries | |||
in which Dow manufactures products | |||||||
1.Excludes Corporate
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Dow Inc. published this content on 16 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 16 May 2024 16:38:17 UTC.