|[December 03, 2012]
Dow Hosts Investor Forum 2012
MIDLAND, Mich. --(Business Wire)--
At its 2012 Investor Forum, The Dow Chemical Company (NYSE: DOW) today
reinforced the Company's commitment to its long-term strategy, and
shared with investors strategic interventions and key catalysts that
will enable Dow to achieve near-term targets and drive sustainable
Dow's Chairman and Chief Executive Officer, Andrew N. Liveris, in his
keynote address to investors, outlined specific actions the Company is
taking to drive down costs, improve cash flow and extract maximum value
from its assets. "We are taking swift and decisive actions to protect
our growth path and drive near-term value," said Liveris. "And we have
built a more simplified organization - concentrating only on those
things that increase cash flow, improve return on capital and drive
Drivers to Near-Term Targets
During the event, Liveris presented several key drivers that will fuel
Dow's near-term earnings growth:
Accelerating interventions to generate cash and reduce costs.
Dow has deployed $2.5 billion of aggressive measures in 2012. These
actions are expected to deliver $1 billion in cost and cash
interventions in 2013, of which $500 million will impact EBITDA(1).
With nearly 40 project cancellation and plant shutdowns announced this
year, the Company is taking swift steps to improve asset utilization,
drive down structural costs - particularly in Europe - and enhance
return on capital.
Further bolstering Dow's significant feedstock advantage and
driving sustainable margin expansion for downstream, derivative
businesses. The Company remains on schedule to restart its St.
Charles Operations (Louisiana) ethylene cracker, which is expected to
deliver a $150 million increase in EBITDA in 2013. Taken on the whole,
Dow's U.S. Gulf Coast investments in ethylene and propylene
integration, coupled with favorable shale gas dynamics, are expected
to deliver $2 billion in additional EBITDA in 2017. The Company also
reaffirmed that its Sadara joint venture remains firmly on track, with
an anticipated construction workforce peak of about 60,000 people next
year, and operations slated for start-up in 2015. Once operational,
this joint venture is expected to deliver EBITDA margins of
approximately 40 percent.
Prioritizing innovation to hone in on markets and technologies with
clear, near-ter earnings delivery and in high-return businesses,
such as Dow AgroSciences, Electronic Materials and Performance
Packaging. Over the last several years, Dow has successfully
rebalanced its innovation pipeline toward commercialization. Today,
programs in the implementation stage of Dow's R&D pipeline represent a
net present value of $7 billion - an approximate $200 million increase
versus 2011. Importantly, the Company has also reduced exploration
programs - reprioritizing resources to focus on near-term
commercialization opportunities. In addition, Dow has announced it is
halting growth projects where significant market shifts and government
policies have triggered fundamental changes, such as alternative
"Dow's key growth catalysts are embedded in our portfolio. These
catalysts, such as our innovation portfolio, the ethylene cycle and our
investments on the U.S. Gulf Coast and Sadara, will drive sustainable
growth and margin expansion," Liveris said. "And with our new,
streamlined operating structure, we have the agility and flexibility to
move quickly in executing ongoing, disciplined portfolio management.
This is exactly what you are seeing and can expect from us."
As the Company looks ahead to 2013 and beyond, Liveris emphasized Dow's
commitment to protecting the Company's earnings foundation, enhancing
its financial flexibility and consistently rewarding its shareholders.
"We are proactively and aggressively implementing the tough decisions
required to deliver consistent value growth in this new, slow-growth
world," Liveris said. "Dow's cash flow is strong and we remain committed
to our priorities of paying down debt, rewarding shareholders and
funding prioritized, organic growth. With a dividend yield in excess of
four percent, Dow is among the top in its peer group for shareholder
2012 Investor Forum
Dow's 2012 Investor Forum was attended in-person by more than 125
investors and media, and was broadcast live over the Internet. A replay
of the webcast will be available under the Investor Relations section of
Dow's website at www.dow.com.
Dow (NYSE: DOW) combines the power of science and technology to
passionately innovate what is essential to human progress. The Company
connects chemistry and innovation with the principles of sustainability
to help address many of the world's most challenging problems such as
the need for clean water, renewable energy generation and conservation,
and increasing agricultural productivity. Dow's diversified
industry-leading portfolio of specialty chemical, advanced materials,
agrosciences and plastics businesses delivers a broad range of
technology-based products and solutions to customers in approximately
160 countries and in high growth sectors such as electronics, water,
energy, coatings and agriculture. In 2011, Dow had annual sales of $60
billion and employed approximately 52,000 people worldwide. The
Company's more than 5,000 products are manufactured at 197 sites in 36
countries across the globe. References to "Dow" or the "Company" mean
The Dow Chemical Company and its consolidated subsidiaries unless
otherwise expressly noted. More information about Dow can be found at www.dow.com.
Note: The forward-looking statements contained in this document
involve risks and uncertainties that may affect the Company's
operations, markets, products, services, prices and other factors as
discussed in filings with the Securities and Exchange Commission. These
risks and uncertainties include, but are not limited to, economic,
competitive, legal, governmental and technological factors. Accordingly,
there is no assurance that the Company's expectations will be realized.
The Company assumes no obligation to provide revisions to any
forward-looking statements should circumstances change, except as
otherwise required by securities and other applicable laws.
(1) EBITDA is defined as earnings (i.e., "Net Income") before
interest, income taxes, depreciation and amortization. A reconciliation
of EBITDA to "Net Income Available for The Dow Chemical Company Common
Stockholders" is provided following the Operating Segments table. EBITDA
margin is EBITDA as a percentage of reported sales.
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