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Q2 2015 EARNINGS CALL – Dow Chemical

Dow Chemical · Jul 23, 2015 · 36 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. Q2 2015 EARNINGS CALL – Dow Chemical – slide 1
    The Dow Chemical Company 2Q 2015 Earnings Conference Call July 23, 2015 The Dow Chemical Company
  2. Q2 2015 EARNINGS CALL – Dow Chemical – slide 2
    Agenda 2Q 2015 Overview Segment Results Outlook and Key Earnings Drivers 3
  3. Q2 2015 EARNINGS CALL – Dow Chemical – slide 3
    Dow Reports 2Q 2015 Results Operating EPS rises to 0.91 up 23% YoY Operating EBITDA reaches 2.5B up 210MM YoY and representing 2Q record Company achieves new 1H operating EBITDA record of 4.9B Operating EBITDA margins expand to 19%,…
  4. Q2 2015 EARNINGS CALL – Dow Chemical – slide 4
    Financial Performance Metrics (on a trailing twelve-month basis) Operating EPS Operating ROC Percent Payout 3.50 12% 70% 3.00 11% 60% 2.50 10% 2.00 50% 9% 1.50 8% 40% 1.00 7% Yearly declared dividend per share/operating EPS…
  5. Q2 2015 EARNINGS CALL – Dow Chemical – slide 5
    2Q15 Financial Performance 2Q15 2Q14 B/(W) Revenue (MM) 12,910 14,917 (2,007) Operating EBITDA (MM) 2,452 2,242 210 Operating EBITDA Margin 19% 15% +396 bps EPS ex. Certain Items 0.91 0.74 0.17 6
  6. Q2 2015 EARNINGS CALL – Dow Chemical – slide 6
    Agenda 2Q 2015 Overview Segment Results Outlook and Key Earnings Drivers 7
  7. Q2 2015 EARNINGS CALL – Dow Chemical – slide 7
    Agricultural Sciences Continued Improvement in a Challenging Macro Environment Competitive environment with weak commodity prices Quarterly Financial Performance New Crop Protection sales increased 5% led by spinetoram insecticide 275…
  8. Q2 2015 EARNINGS CALL – Dow Chemical – slide 8
    Consumer Solutions Continued Strength in Semiconductor and Automotive more than Offset by Consumer and Display Dow Automotive Systems 2Q operating EBITDA record Quarterly Financial Performance Margins expand on continued demand for…
  9. Q2 2015 EARNINGS CALL – Dow Chemical – slide 9
    Infrastructure Solutions Value-Add Products Lead, more than Offset by Energy and Monomers Headwinds Energy & Water Solutions Strong Water more than offset by Energy Quarterly Financial Performance Demand continues to grow for…
  10. Q2 2015 EARNINGS CALL – Dow Chemical – slide 10
    Performance Materials & Chemicals Ongoing Productivity Actions Drive Continued Segment-Level EBITDA Improvements Polyurethanes Margin and volume drive record Q2 operating EBITDA Quarterly Financial Performance Broader market…
  11. Q2 2015 EARNINGS CALL – Dow Chemical – slide 11
    Performance Plastics Record Performances with High Demand for Dow Products; Feedstock Flexibility Also Provides Healthy Tailwind Dow Packaging and Specialty Plastics Record Q2 operating EBITDA Quarterly Financial Performance Strong…
  12. Q2 2015 EARNINGS CALL – Dow Chemical – slide 12
    DCP Olin Transaction Update Structure and Considerations Impact - Dows Capital Structure Reverse Morris Trust structure split-off intention 2Q 2015 Pro Forma Impact Total value of 5.6B, pre-tax consideration 9B; 2.0B Cash and Cash…
  13. Q2 2015 EARNINGS CALL – Dow Chemical – slide 13
    Agenda 2Q 2015 Overview Segment Results Outlook and Key Earnings Drivers 14
  14. Q2 2015 EARNINGS CALL – Dow Chemical – slide 14
    Outlook U.S. is robust, especially in Packaging, Auto, and Construction (esp. Housing) China has been and will continue to be soft, with growth in some markets driven by domestic consumption W. Europe is stable despite the Greece…
  15. Q2 2015 EARNINGS CALL – Dow Chemical – slide 15
    Earnings Drivers 2015 and Beyond Focus and discipline with emphasis on EVA, portfolio management, and shareholder remuneration remaining our drumbeat Key projects starting up in next six months first units start up at Sadara and in…
  16. Q2 2015 EARNINGS CALL – Dow Chemical – slide 16
  17. Q2 2015 EARNINGS CALL – Dow Chemical – slide 17
    Modeling Guidance End-markets YoY volumes expected to be marginally up versus PQ Equity Earnings Sadara costs will ramp approx. 50-75MM versus SQLY, EE excluding Sadara down on lower EG prices and lower volume after a record volume…
  18. Q2 2015 EARNINGS CALL – Dow Chemical – slide 18
    NGL Balances Remain Favorable US Ethane Supply / Demand Balance US Propane Supply / Demand Balance 2200 1200 2750 1000 Propane Exports/(Imports) (MBD) 2500 800 Propane Supply/Demand (MBD) 2000 Ethane Surplus /…
  19. Q2 2015 EARNINGS CALL – Dow Chemical – slide 19
    Market Pulse 2Q15 Heat Map Eastern Europe, ME, Africa, Western Europe Developing Asia Developed Asia Latin America US & Canada Market India Construction Packaging Relative Portion of Dow Revenue…
  20. Q2 2015 EARNINGS CALL – Dow Chemical – slide 20
    Key Earnings Drivers on the Horizon ISOCLAST ARYLEX AgroFresh ENLIST DUO LPG Chlor-Alkali and Derivatives BETAMATE Pack Studios Transaction Penoxsulam rice herbicide PDH USGC Sadara first products Sadara PU derivatives Sadara EO…
  21. Q2 2015 EARNINGS CALL – Dow Chemical – slide 21
    Agricultural Sciences Dollars in millions 2Q15 2Q14 Sales 1,747 1,907 Price (6%) Volume (2%) Operating EBITDA 269 249 Equity earnings (included in EBITDA) 0 2 2Q15 Trends vs. 2Q14 Sales Price Volume Crop Protection…
  22. Q2 2015 EARNINGS CALL – Dow Chemical – slide 22
    Consumer Solutions Dollars in millions 2Q15 2Q14 Sales 1,096 1,195 Price (7%) Volume (1%) Operating EBITDA 236 263 Equity earnings (included in EBITDA) 19 21 2Q15 Trends vs. 2Q14 Sales Price Volume Consumer Care Dow…
  23. Q2 2015 EARNINGS CALL – Dow Chemical – slide 23
    Infrastructure Solutions Dollars in millions 2Q15 2Q14 Sales 1,961 2,268 Price (13%) Volume 0% Operating EBITDA 267 310 Equity earnings (included in EBITDA) 35 45 2Q15 Trends vs. 2Q14 Sales Price Volume Dow Building &…
  24. Q2 2015 EARNINGS CALL – Dow Chemical – slide 24
    Performance Materials & Chemicals Dollars in millions 2Q15 2Q14 Sales 3,241 3,761 Adjusted Sales 3,241 3,662 Adj. Price (15%) Adj. Volume 4% EBITDA 572 447 Equity earnings (included in EBITDA) 122 97 2Q15 Trends vs. 2Q14…
  25. Q2 2015 EARNINGS CALL – Dow Chemical – slide 25
    Performance Plastics Dollars in millions 2Q15 2Q14 Sales 4,806 5,713 Adjusted Sales 4,775 5,713 Adj. Price (21%) Adj. Volume 5% Adj. Price excluding Hydrocarbons & (14%) Energy Adj. Volume 9% Operating EBITDA 1,166 1,017 Equity…
  26. Q2 2015 EARNINGS CALL – Dow Chemical – slide 26
    Reconciliation of Non-GAAP Financial Measures Three Months Ended Six Months Ended In millions 06/30/15 06/30/14 06/30/15 06/30/14 Operating EBITDA 2,452 2,242 4,853 4,638 Certain Items -75 -18 587 -18 EBITDA 2,377 2,224 5,440 4,620 -…
  27. Q2 2015 EARNINGS CALL – Dow Chemical – slide 27
    Supplemental Information - 2Q15 Certain Items Impacting Results In millions, except per share amounts (unaudited) Pretax Impact (1) Net Income (2) EPS - Diluted (3)(4) Three Months Ended Three Months Ended Three Months Ended 06/30/15…
  28. Q2 2015 EARNINGS CALL – Dow Chemical – slide 28
    Additional Supplemental Information - 2Q15 Certain Items Impacting Results In millions, except per share amounts (unaudited) Pretax Impact (1) Net Income (2) EPS - Diluted (3) (4) Six Months Ended Six Months Ended Six Months Ended…
  29. Q2 2015 EARNINGS CALL – Dow Chemical – slide 29
    Certain Items Affecting Results- 2Q15 Certain items increasing (decreasing) EBITDA by operating segment In millions Three Months Ended Six Months Ended 06/30/15 06/30/14 06/30/15 06/30/14 Agricultural Sciences (14) (14) Consumer…
  30. Q2 2015 EARNINGS CALL – Dow Chemical – slide 30
    Supplemental Information Results in the second quarter of 2015 were impacted by the following items: Pretax restructuring charges of 375 million. On April 29, 2015, Dow's Board of Directors approved actions to further streamline the…
  31. Q2 2015 EARNINGS CALL – Dow Chemical – slide 31
    Emerging Geographies Dow defines emerging geographies as the following: Eastern Europe, including Russia Asia Pacific, excluding Japan, Australia and New Zealand Latin America India Middle East Africa 32
  32. Q2 2015 EARNINGS CALL – Dow Chemical – slide 32
    Principal Joint Ventures Although Dow participates in many joint ventures, the most significant joint ventures from a financial perspective are: Dow Corning Corporation EQUATE Petrochemical Company K.S.C. The Kuwait Olefins Company…
  33. Q2 2015 EARNINGS CALL – Dow Chemical – slide 33
    Preliminary Results for Principal Joint Ventures Principal Joint Ventures - Total Dow Proportionate Share Dollars in millions (unaudited) Dollars in millions (unaudited) 2Q15 2Q14 2Q15 2Q14 Sales 4,456 4,938 Sales 1,981 2,150 Adjusted…
  34. Q2 2015 EARNINGS CALL – Dow Chemical – slide 34
    Reconciliation of Equity Earnings 2005 2006 2007 2008 2009 2010 2011 2012 Quarterly Average Equity Earnings excluding certain items 241 240 281 197 181 278 259 175 Equity Earnings excluding certain items, for the year 964 959 1,122 787…
  35. Q2 2015 EARNINGS CALL – Dow Chemical – slide 35
    Global Operating Rates as a Percent of Capacity Year QTR YTD 2011 1Q 83% 83% 2Q 84% 83% 3Q 83% 83% 4Q 72% 80% 2012 1Q 83% 83% 2Q 78% 81% 3Q 83% 81% 4Q 78% 81% 2013 1Q 82% 82% 2Q 78% 80% 3Q 82% 81% 4Q 82% 81% 2014 1Q 83% 83%…
  36. Q2 2015 EARNINGS CALL – Dow Chemical – slide 36

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