DOW REMAINS A COMPELLING INVESTMENT OPPORTUNITY

Source: Dow data, CapitalIQ, FactSet Company disclosures

Industry-leader and well-positioned to unlock additional value by capturing fast-growing demand for sustainable solutions

  • • Differentiated portfolio delivering in attractive end-markets growing faster than GDP

  • • Industry-leader on low-carbon and circularity with clear path to zero-carbon emissions while growing earnings

  • • Global scale in key value chains, with low-cost positions and advantaged derivative and feedstock flexibility

Robust dividend yield and free cash flow generation compared to peers, sector and overall market

  • • Committed to delivering industry-leading cash flow generation

  • • Attractive shareholder remuneration targets of ~65% of net income over the economic cycle

Dow in-flight actions raising underlying mid-cycle EBITDA above pre-pandemic levels while maintaining disciplined and balanced capital allocation

  • • Earnings upside from high-return, low-risk investments with capex at or below D&A

  • • Targeting >13% ROIC across the economic cycle

Industry-leading Portfolio With Upside Opportunity from Sustainability to Create Significant Shareholder Value

  • (1) As of March 31st 2022

  • (2) Unless otherwise noted, all Dow Financial information for 2019 is on a pro forma basis

  • (3) Free Cash Flow Yield for 2021 excludes the impact of the $1B elective pension contribution

  • (4) Peers include Arkema, BASF, Covestro, Eastman, Huntsman, Lyondell and Wacker

  • (5) See appendix for definition on Non-GAAP Metrics

BENCHMARKING PEERS

Benchmarking conducted against segment level peers if sufficient information disclosed, otherwise corporate level

(1) Segments updated to reflect peer external reporting structure changes in 2021; historic data updated to align with new segments

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 among the best in the peer group with margin expansion in all operating segments

Cash Flow Conversion trailed the peer median due to higher non-cash equity earnings impacting cash conversion in 2021

Total

Free cash flow yield was best-in-class on 3-year average performance

Dow

SG&A + R&D as % of sales remained among best in peer group from continued cost discipline

Operating Return on Capital performance 3- year average was top-quartile and in-line with Dow's over the economic

cycle target

Shareholder remuneration yield remains top-quartile with continued focus on attractive shareholder returns

Debt reduction was top-quartile as a result of disciplined and balanced capital allocation

Source: Dow data, CapitalIQ, Company disclosures

  • (1) Unless otherwise noted, all Dow Financial information for 2019 is on a pro forma basis

  • (2) Dow Cash Conversion and Free Cash Flow Yield for 2021 excludes the impact of the $1B elective pension contribution

  • (3) Peers as defined at beginning of presentation

  • (4) See appendix for definition of Non-GAAP Metrics

TOTAL DOW

BENCHMARKING SNAPSHOT (1,2,3,4)

CORE STRENGTHS

  • • Hallmark safety performance and operational excellence

  • • Global footprint with integrated value chains providing a low-cost to serve model with in-region presence

  • • Differentiated portfolio delivers a broad suite of offerings to attractive end-markets growing faster than GDP

  • • Innovative product and technology pipeline to provide sustainable solutions to address world challenges

FY21 UPDATE & FY20

Source: Dow data, CapitalIQ, Company disclosures

FOCUS AREAS

  • • Execute on 'Decarbonize and Grow' Strategy to deliver >$3B of underlying earnings growth

  • • Maintain and grow leadership positions in key markets with a top-quartile cost structure

  • • Capitalize on growth from high-margin, sustainability-driven applications

  • • Prioritize lower-risk, faster-payback projects with capex ≤ D&A over cycle

  • • Industry-leading cash flow generation and disciplined capital allocation

  • (1) Unless otherwise noted, all Dow Financial information for 2019 is on a pro forma basis

  • (2) Dow Cash Conversion and Free Cash Flow Yield for 2021 excludes the impact of the $1B elective pension contribution

  • (3) Peers as defined at beginning of presentation

  • (4) See appendix for definition of Non-GAAP Metrics

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Dow Inc. published this content on 21 April 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 21 April 2022 13:04:08 UTC.