DOW - Earnings call transcript Q2 2024

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Operator

Thank you for standing by. My name is Krista, and I will be your conference operator today. At this time, I would like to welcome everyone to the Dow Inc. 2024 Earnings Report. [Operator Instructions] Thank you. I would now like to turn the conference over to Andrew Riker, Andrew, the floor is yours.

Andrew Riker

morning. Good joining for today. you Thank accompanying provided posted this and are our The website. on on webcast slides I'm Dow's Andrew Riker, Investor Relations President. Vice and call today's Chief Officer. are Fitterling, Jeff Officer; Dow's Financial Tate, Leading Chief Chair Jim Executive and note, the cautionary release to and Please are earnings in related comments statements statements contain and our subject the slides. contained news forward-looking refer our public principal uncertainties. and to filings about Please risks for further information items. specified, otherwise all Unless applicable, significant financials, exclude where

GAAP financial the We support news refer comparable then and the non-GAAP macroeconomic and on most are more A disclosures measures. Jim will segment how we as release our that are color conditions performance. earnings share environment of and will strategy, including posted upside followed website. reconciliation a our measure on improve. contained results will advance growth. for key our is operating on and will how will capture today's also milestones to update agenda an X slides the near-term discussion earnings macroeconomic by will call. associated our priorities Jim other review our proven quarter directly on in Slide for our guidance, long-term modeling On provide and Jeff then second playbook

Following your that, we questions. will take

Now I turning the call over to Jim.

James Fitterling

United up ago Coatings. the and Performance X% Canada. Specialty Beginning and achieved We versus . Volume macroeconomic building and as down as in growth. Plastics like and a well the a X% the Andrew. second and quarter top growth year and States led period sales line sequentially, year-over-year particularly period quarter, versus increased Packaging despite durables. on volume recovery, In you, were gains Slide X. areas slower-than-expected sequential Net third gains by Thank bottom Team consumer billion, ago construction Dow and in X% and with $XX.X delivered this driven Materials of global consecutive the by year

India due Asia East, regions to Sequentially, decreased Europe, or by million lighter $XXX Middle an on and million Sequentially, were Europe, Specialty Packaging flat. sequentially, million, and EBIT gains X% $XXX earnings all & price down flow was flow conversion of was resulting was basis. $XXX on increased local and which X%. Performance Operating in efficient increased EMEA. sales, up a Energy and primarily from an volume cash increased working capital, except volume and in trailing Pacific, in the feedslate year-over-year. reflecting price Materials gains release Coatings. in Africa Cash Plastics X%, led Hydrocarbons operations higher Excluding which X% Local cracking gains with XX% in XX-month

report. million growth. the progress on the those to environment returns and cash report how flow Intersections including dividend we profitable $XXX support $XXX $XXX published long-term million we June, and making positive generation our society million actions focus XXXX in Our that impact share in through In repurchases. importantly, enabled shareholders, showcases are and This on

was Packaging volume lighter demand Asia downstream and gains. due maintenance driven increased operating hydrocarbon Now merchant integrated performance operating for and more licensing prices, decreased higher Sequentially, X. In segment, Europe. turning This primarily million to price $XXX declines polymer EBIT sales. to and -- lower lower cracking EBIT million, lower and primarily the Specialty as $XXX million, by sales, Slide $XX to primarily planned operating our on segment were integrated due Pacific. margins year-over-year in was behind feedslate was than by higher nonrecurring Local activity year-over-year. by down Volume to offset functional polyethylene both in Products higher lower polymers due margins,

by million by segment, by construction $XX polyurethane Infrastructure planned lower the improved the integrated Results segment, chemicals. million, of and $X year the partly Local lower ago Coatings decreased an higher in up million ago operating versus broad-based Materials EBIT $XX Industrial Intermediates EBIT EBIT driven period. $XX driven declined & driven offset and up, Performance operating growth. geographic compared as was year-over-year, million, the but was driven And maintenance volume losses was volume & by Sequentially, margins. to to were volumes. gains activity in by Moving as Operating equity price higher well business and $XXX period equity improvement million earnings, year

activity. both geographic maintenance million, volume in and price by EBIT volume businesses regions. up, operating Local in planned by but declined all driven Sequentially, driven increased both lower year-over-year, was and businesses $XXX gains and gains price

Now some review playbook in and I'll action. our to over to turn our share outlook Jeff it examples of

Jeffrey Tate

you, morning today. call and everyone good Jim, our to Thank joining

market expected. term, eye to slightly. Overall, close inflation a by Slide in global unchanged been global weight X. to pace lower continue was remain rates macro economic led decelerated global tensions. has quarter manufacturing expect China, U.S. February the is XXXX, we since while This near on geopolitical where we largely the the the and the positive economic has growth of to on than the In keep consumer, dynamics second Moving the interest recovery primarily of PMI

X has robust which for And U.S. reflected from costs. been port in manufacturing stabilizing the Europe, remained which continues impacted drive by home the were below to soft In Looking building steady, in across permits primarily buyers demand growth and year-to-date regions. both but verticals, year Infrastructure market most June. contractionary and be levels is reason through demand is industry our to slightly remained primarily the transportation congestion despite in demand were value down U.S. sellers demand demand, sales, domestic and paint prior June, soft global as across experiences across and PMI construction levels, residential Canada sales rising in tend and Asia, packaging packaging has the residential polyethylene. seeing chain export In territory. existing

June. but in remained spending May. sales negative were down shown low. has in in and in In And through X% month new first X.X% were most since increased sales the in retail confidence Europe, XX.X% but resilience by PMI year-to-date contractionary consumer retail where of loan XX.X% from regions, year-over-year Eurozone remains last furniture in June, construction and prices to declined territory bedding China, except X.X% Consumer in month, July U.S., China, remained July. June, deceleration year-over-year the sales In XXXX. marked up down

were capitalize China In mobility, X.X% in X% year-over-year -- materialize more differentiated third auto on and volume while this was shortly. year-over-year areas U.S., quarter in backdrop, for consecutive June, to portfolio in we'll demand down by and Against to operating strength on in potential discipline. of down these auto the actions than And year-over-year of to growth, And I'll delivered production tariff financial and May. June continue maintaining the in amidst after flow increases increasing the sales detail leverage we in our more touch

Now turning to Slide our X. outlook on

be performance, and sequential quarter continuing of markets our slightly minimal third We to in summer signals and we in positive above typical the continue. strain North expect for lower sequential & modest will polyethylene demand from expect Plastics Barrel earnings Domestic the will top second disruption experience export remain Packaging will experienced Gulf growth. In improvement. Specialty Hurricane in U.S. the holidays. line robust EMEA Coast, some from and quarter We segment, America expect sequential seasonality demand we the

has Louisiana the demand planned in completion remains second quarter. the addition, in turnaround mixed. offset but market by the St. consumer pharma conditions another sign Heavy Charles, our In of Sabin, quarter resilient, our markets & will durables in Intermediates in energy cracker Industrial at of Texas not and cracker Infrastructure any be significant inflection. third remain segment, turnaround Demand shown end

due headwind Coast. the approximately an planned U.S. expect million in $XX maintenance the activity to We Gulf

tailwind. growth at quarter operations and plus applications headwind of prices will up glycol X $XX lower provide markets are the most through -- In approximately million Performance $XX be end in million for $XX downstream we will to of the contribute activity a continue & demand June, markets still successfully under we Importantly, silicone seasonal expected Lower construction our a Coatings a end planned of building sequential pressure. end at ramp to across and million. the facility Louisiana segment, while are Materials which started maintenance tailwind see the

X. Slide to Moving

to focused is of global Vantage playbook footprint over As in XXXX. expect of benefit our asset every we our the approximately We executing we value from we navigate the cost region. are Americas, positioned cycle. the -- current XX% in proven market with on capacity by to increased deliver XX% true production This conditions, where global reach located, particularly is our and

low-cost strengthen to treat to feedstock by to and on positioned position. positions, Team position Dow on well growing Dow deliver global our as industry-leading flexibility, operate filing focus low-cost financial flow And leading discipline supported maintain our for track is maximizing investments. cash we our remain continues we products. financial further feedstock demand with to serve countercyclical our mindset, our With capture

if . with include Our continued actions minimal any liabilities derisking tax our of outlay. pension

In initiated XXXX. X fact, plants this our end the month, termination process of we U.S. of the by vision for

of While a in not reducing company. able patient the benefits, way to previously impacting paying risk was cost-effective costs earned to secure, benefits DOW administrative provide and

Lastly, expect to to in We billion by in investments, our Saskatoon. our strategic executing levers. project $X.X enhance Fort DOW we in unique over cash to the use growth proceeds plan near the term, including our support to generation -- flow

project. which aligned tax -- expect CapEx with $X.X closely cash more for receive and turn the In our addition, to back that, With it Jim. I'll than we deployment to in XXXX, billion by is

James Fitterling

Thank you, Jeff.

Moving to Slide X.

as levels. expectations in of EBITDA $X end upside capture earnings is certain more markets. we billion slower reflect Dow recovery XXXX Our to return mid-cycle than for to pace a in positioned

positive over the portfolio. stabilization line in year-over-year same period. the X by are quarters improvement entire top We across the is well signals our price our as as by volume demonstrated encouraged enterprise last that across This

absorbed not global recent We're of In we improving In management. approach our XXXX, builds a have America higher do particularly in assets, Industrial to Intermediates starting see growing the Europe. cost inventory rationalization to anticipate fundamentals cost we continue capacity XXXX the maintained also the frame. & forward, as until to time Americas Plastics, in And in been capacity to polyethylene by supply-demand fully Infrastructure, any Packaging see expect and North advantage Specialty demand. going new disciplined to we've

to The polyurethanes Solutions, majority the U.S. of interest beginning Industrial aligned EO cutting business. capacity derivatives. has our cycle in accelerate our In Coast Gulf an demand of rate higher-value will

X Coatings, glycol will our are With of additions impact slow Industry in And in the impacting mobility, positive due nonintegrated Performance Materials cash facility siloxane energy negative and end restart pharma markets. Louisiana, consumer, expected see prolonged players. to in successful capacity margins to we &

is highly correlated Coatings levels pre-pandemic demand home And see year. with next to existing by our to lastly, market forecasted business sales

positioned levels. with upside earnings annual economic indicators, significant capture mid-cycle combined With these positive at an to Dow recovery, is

and countercyclically Next, risk, our financial than lower invest done drive strengthen has on Slide in will growth to projects us X. The billion allowed more XXXX. work $X annual we've higher return earnings foundation, by to that

than date, are near-term million EBITDA on mid-cycle underlying of billion. progressing mid-decade. of and added deliver have Our investments we the deliver remain capacity $X $XXX $X to more to that by billion To track

value enhanced higher growth and for silicones site downstream So debottlenecking Spain. flutanic copolymers produce projects product far liquid silicone advancing Tarragona, elastomers also to this we've rubber for in focal and support multiple our our year, mix at films We're adhesives. ethylene to

in Our Saskatoon Phase billion new piling also XXXX. XXXX. The X Phase advancing XXXX path EBITDA expected is $XXX our Major run direct will to where up of than and our additional an we expected second project. continued of start more is foundation third in is will by on X annually by to making transformed million deliver solid the our in EBITDA anchor at net in started rates partnerships team waste in our and which X quarter. Construction the full foundation $X incremental in work underlying quarter cracker. Fort will deliver program, investments. X project the to XXXX We're through progress strategy start-up begin

U.S.-based products, enabling June, brands we demanding. circular a the In acquire mechanical us while more the are accelerate This to goals agreement customers and announced recycling. help in Circulus, downside high-performance our leading will

capacity of quarter. third combined the Consistent also our to is That sell recycled deal in expect the metric announced the materials of by in the owner quarter XXXX. which that is mindset, X we part which to expected quarter with our Plastics annually and Specialty close of adhesives includes we Arkema best XX,XXX portfolio. of business, to tons reached with second an facilities agreement We the close transaction with fourth Packaging laminated

driving we And earnings to maintain XX. and both on on We're the advanced planning lastly, using on cost half Slide and focused returns delivered commercialize long-term mechanical our playbook and demand as strategy. with allocation while peer greater cash circularity delivering than of closing, In to growth and the second remains Dow discipline, products capturing benchmark, mindset the committed serve closely offtake better recycling in facilities. capital our we're year, and our high-value we've by from our operational Eura executing generation and financial low will priorities optimizing margins. costs advance we managing our to

higher Our allows all this, raise to well create underlying us higher-value With bottom and top of financial in in our to flexibility areas countercyclically circularity. upside DOW significant drive will that positioned line we I'll invest and the is back growth get returns. us started as cycle With unlock benefit investments dynamics of that, to with shareholder turn improve, enabling and full to the Q&A. it these Andrew

Andrew Riker

Jim. you, Thank

Q&A. our to your please I following remarks like of would you questions, the the provide X instruction. Q&A both to apply our remind to Operator, and as that statements forward-looking prepared Now

Operator

you. Thank

We Ahmed Alembic Global. session. question will question-and-answer [Operator the from with begin Instructions]Your first now Hassan comes

Hassan Ahmed

Jim take But St. at I the around commentary ENSD, up. sequentially. trying of from QX the -- obviously, QX hikes and the to baked flat levels cracker meaning, as better a guys has American what's price get for underlying you relatively exports been the seems are inventory steadily I North perspective, planned Obviously, have guidance Charles just are fundamental guys of sort that look have seems sort sequential sense It it around of you of Particularly, table. I'm maintenance. sort EBITDA a guys looking into question on understand just seems guidance. down. . It a you industry Jeff, some of that picking an

you guidance. if those your QX maintenance, into beyond planned just me sense could give a you have guys for of So baked what the fundamentals

James Fitterling

North expect America. to -- I do see

less at will in X the Gulf barrel margin $X.XX the is We Coast. so of the it some that expect hurricane think up quarter, pricing. we in correct. was be But crank mentioned of itself. us improvement do -- have got today. that's I be to that a we Europe, pronounce very not still which the happens, positive reasons, think stickier quarter, ethane it's is the be could volume and in up cracker sales But bit I -- for or for I when demand propane. the we expect the what plan reverse but in and a expectation backs In advantageous than I you byproduct that expect to crack do added spread, -- it second not directionally in And have insanely low the to cracking light and to byproducts to going derivative but led $X.XX X culmination our it's we see Europe. But you'll good. here is little still less

volumes, been across that have you If at derivatives the look up. board

that Asia some volumes congestion barriers. over in And was Asia low export there. quarter, tariff get of kind second because ahead a little of of bit lot mainly pushing out the in China to a especially some was caused

continued we'll export U.S. I environment the I that's itself think And working strong see Gulf out. on Coast. think

are very are right And and exports mentioned, historically inventories strong. inventories as with in right line where they've you now, been are

So is cost operating in I volumes expect we've strong think to be take pricing rates us. do got for third strong, quarter. there that advantaged for the the the hold are derivative environment positions to I

more any turnarounds than net the they think second won't be I in quarter. So were

in third I quarter. think see some you'll slight improvement

Operator

question with next of Your Vincent comes line Andrews Stanley. Morgan the from

Vincent Andrews

does are your finally your a on into come going Jim, One, seem opposite period to love to going where like things interest might X would reactions. of high-level rates get to sort we're that have thoughts it your get be things we business, construction. particularly politically, to down, which and that. may reentering expect tariffs be to building But broadly and positive geopolitically would with and period also like for a exposure I duties

XXXX? if you of sort could those wondering look for impact both and we Dow I'm So what of into of as contrast compare dynamics can be the

James Fitterling

-- we interest that do in orchestrate to -- we this Happy by to year. On had that. the probably expected time,

qualify think seeing haven't see -and land are is like so see couple start right X%. rates housing for things of wordage weight going and get yet. I inventories mortgage -- I of going who part to a think the have rates something to higher do part a you staffing the we at you're the market, you're the and now We expectation at we're I on people people the to a see off of of first it financial that think seen look will -- mortgages because to rates these

sidelines in We'll want sell a the see get they move because to some properties do going been to them start people to on -- who've refinance. to We're people sitting advantage to can for the to start and get the album and see you're chemicals, set a domino you specs happens. building mortgages then effect get and -- now what we qualified to some going sell

existing in bite. to pretty both partners, go to -- starting builds on so -- get got other appliances, tends that on You a the all help things that, stores and you've you and That new drives quickly. that course

We things we but seen click. closely, Obviously, haven't yet. we're seen it managing that haven't

the geopolitic Yes. side, On

think other sides come I we're I would view built spectrum, on closes those is are our behind say subsidize from coded that many the we're into in tone -- capacities we more on that a that to both -- lot and both. driver going markets. for big the a products expecting on on political of

see world in that around we areas. to [indiscernible] brought the starting all different You're against time

I think to XX% we see the to And going whatever with most on on most to in the going And people the case about -- it so to we is of see believe XX% range. other some moving, prepared as get is the how you flows years make so to election. Europe investment think -- get happening on bring the from those markets but impact to try are we're of what subsidy activities a that than you what's going them -- depending for I trying semiconductors of around there today increased of concert keep on going sure -- have growth to to will a Mexico, to are that from that most that's take you of halt the amount to few that of and on our outcome think if host see And manufacturers we're claims and of get, perspective supply whole from -- but in world. industry always, and the just chains, to just not and important the product to

Operator

Your next question from with comes of Steve Byrne Bank line the America. of

Steve Byrne

if incremental similar Xx per that the a depending has on that of per do is to hard objective billion change And pound, And X huge EBITDA give must extension I Yes. assets, existing that a commitments product pound you. would what your that there waste, of respect EBITDA questions there your just time on regarding couple be the is comparable of that have an you you for incremental because Fort polyethylene? really the maybe way, X. project, basis, pound We're per that? EBITDA audio transform a I you Saskatchewan Jim, have some the on per your -- profitability million to $X Slide the pound customer confidence having Or competitor you expect in EBITDA an this. expansion? tons this you Thank And the is your of type on in that that a mid-cycle a would in really a you. have it helpful. hearing think and range this With be for

Do comment the mechanical say, platform. would versus -- see relevant I driven? that much where in profitable to how assume can it's you outlook you is most circular on you pyrolysis your And is, do how plastic much

James Fitterling

the the to There Difficulty] think mentioned to could as go. but ability get see I -- [indiscernible] [Technical some in it's additional general, be before, the that similar we I upsides And

the the the believe from that Manage models, -- investment the post outcome equivalent typically focused which was we're circles investment to on and have the capital to of something we the guys telcos or in seen you profitable [indiscernible] that quality, on is

year the quality Difficulty] of about of XX,XXX per tons up was or [Technical

Operator

Deutsche David question next from line of comes the with Begleiter Bank. Your

David Begleiter

rating for is How Jim, roughly control? at is of run you're billion. EBITDA. much ramp next year billion of $X.X in Consensus earnings that $X Dow's

James Fitterling

come what good glyco now, see with coming we terms not market and in David, The be goods coatings, right question PNSP, will polyurethane how and of coming does the and we pretty going think by in That's line -- what And that's the be and to as well. in housing back sight. about market here. back. rates back, with the mark biggest construction. That's will I-X, have of driven feel that. what happens we and good happens durable real be X interest quickly Europe I silicones, Plastics and Asia a just

Operator

line of JPMorgan. with Your next question Jeff comes the Zekauskas from

Jeffrey Zekauskas

Maybe couple a of questions for Jeff.

corporate $XX million versus what Your been that? million $XX what use and at their doesn't Why a increment, forecast forecast shares. a And higher ago How why is determine that has you've the stay you you public been XX share flat inception year quarter to this share for it good price third Second, million the period. year $XX XX you And versus criteria -- the ago Dow. XX capital will for is was expense use pretty in judge and repurchase you a as level? will its company. since that repurchasing of quarter,

Jeffrey Tate

corporate the you're million to some million past as as $XX what insurance the times. lower, look environmental which lower traditionally had. would the second we in of EBITDA, more much thinking you're well. we've the we operations was When $XX accruals well from we in gains side. going had slightly say, the here. about as some had our in cost on we the second What actually was delivered negative range as of of quarter Appreciate quarter, right, Starting questions to the than be pretty second half year, it at I favorable

million it half the think to to second year, expect million So range. can you of $XX in that when be you the $XX about

share to perspective stay overall you're of have more with commitment we that's capital relation In XX% our one to point our this -- a able and we ability the allocation expectations the we've CapEx the those to And with. that as and back we from that been dilution, cover as to right, think have repurchases, about that capital continued ramp-up trend consistent things consistent to of cash because shareholders going manage at be to deliver priorities. as we're all allocation to to well flow our of

But will we that have a perspective, over will the from in period greatest the look at to criteria time prioritization. what that for allocation return give we capital us comparison commitments our

Operator

Your the Fargo. next Sison Mike line question with comes Wells of from

Michael Sison

didn't In flow lot. flow for your generate half the a second in cash first much the you you give cash maybe free generate feel us half, and the of a full how year? Could free

James Fitterling

you do take that? want to Jeff,

Jeffrey Tate

Yes. really from side, Mike, look cash saw we perspective, you over thanks at for the deliver in some would second $XXX question. first positive the From operations. where all, our quarter, when million of

conversion Our and a XX% million. $XXX at positive was rate was cash flow our free

All of quarter. in we improvements what first delivered are those the over sequential

we're really trending well. So

about you can $XXX think things expect working range. we use from would X to a capital we the million is As $XXX Mike, of full the the of million cash anywhere from act the that standpoint, year,

of moving able of greater equivalents billion dividends X as we're debt, be over well ability a joint deck and to looking the $X here, slide in other out the pleased we're full ventures cash is liquidity levers liquidity at areas good our seen our We've on on and of our our got some where guidance to and forward got we're get as year in key -- flow. some about we But now, which of the billion. related of really right cash You've cash well focused total $XX position. to

done our remind substantive now, deliver the that debt also unique-to-Dow in to the I'd what being we have at anywhere has billion. of to maturities XXXX. billion don't call levers to of And here we you of we'll of fact right from able those billion years, $X.X levers to deliver is DOW several levels And past solid job thing like until that is other least as of well any like the $X $X a over And cash XXXX. expectation

Operator

with from Your Kevin the line Partners. next question Vertical McCarthy of Research comes

Kevin McCarthy

Thank you, as as order any through varied monthly the comment, and versus your on that across Were cadence there look in June out can or your businesses expectations good to as neutral July. you on that you books quarter. hurricane your barrel morning. And Can on the in stood negative period. portfolio net you prior that on whether note, in a impact have and or positive expecting related quarter a the third the you're comment impact well

James Fitterling

of and back ran we we had things. But lines the plants power electrical the week, looks crackers Hurricane end move say Yes. at we all Kevin, July cooling the and we we've forward. ran every would hurricanes, seen as we were Freeport as pretty damage towards I Barrel, pretty through. book We second were beginning -- all obviously see the most finished month. solid up. of the book order order of solid towers the month. a the quarter within you'd through and then softness some

do. $XX on that impact Freeport's and so a And don't I deductible. But to other than them to impact to to that There's how to have it's So Jeff. employees expect much things running. or but we've most some able and volumes. normal focus million and their deductible. a up impact will impact I'd out is, to There insured people they're identified not need back our cost the that significant on it. the that I on no impact issues that for And of help going remember be they no We're the gotten it. we fortunate we're homes, what say jump in barrels,

Operator

BMO Markets. comes question line Capital next the John Your from McNulty with of

John McNulty

way what including about that a didn't so? taken to at of pricing how did follow-up for of for were mean speak of you a down, for on Maybe lots lot it like look your Can some hit own just the inventory does Barrel. necessarily to take the the for you're down and hurricanes or levels capacity major least assets but of you periods, months thinking It week that a of in might and terms next couple what or the market so. long in

James Fitterling

John. Yes. Good question,

can see or frame. starting -- through. typically come not firming the market early impact I tend in to you because that is We hurricanes it's see hurricane we some I and August August early to up July think time things see it cycle them it's of to already would . the in the have when happened tend first the more early in think

think you're seeing is so that be that's firming sentiment And there up the will increase moves. price I what

what in going of bit depending got grades grade impacts as to on what see by grade to well. that's so quarter happening down are think are tighter. some planned and little be going terms downtime going a I become to you've different the what third on you're derivatives And are then

at volumes you've catch customers back So stock got those to point. up outages for up get some and hard, quarter. to plan this the back and say I'd running up third we're trying

it. product to being impact. through And to our areas for ready starting customers a other in the team next the moving is out of Hats there railcars concerns little come for and market ahead about off bit of from

So doing we things always that for a positioned to moving were job keep product customers to good able we of so to advance. react to in do things and and we able get could preparing be that

Operator

with line comes Josh Your Spector next UBS. from question the of

Joshua Spector

early wondering on could you quarter. thoughts fourth some if give was I

thought a be unseasonal that couple improve. improvement So quarters volumes you there'd as some of ago, maybe

there Or quarter, that a million As EBITDA you in other call call it, normal sit are factors buck you fourth seasonal sequentially? would that million, today, we about out trend? would think $XXX down in $XXX

James Fitterling

is plastics to volumes continue and to cost got solid see think advantage. I going we've

So continue see going I Silicones plastics think you're fourth to to positive. is deliver through quarter.

You could fully And have impact derivatives the integrated, volumes see there. an the part. advantage in we because we're on

glycol to We've would the III of quarter. going third back. because going silicones, in is got tailwind up hold So I $XX improve well. million is to think X got we've

is kind of by get will $XXX $XX up ramp full the first that think rate closer quarter run to I to fourth for which and million million, to quarter.

so And that's good.

solid coatings really the had quarter. think I second a

some housing there. even I were issues solid housing very earlier talked and though And of volumes in our the about

some to now pretty good I right think see actually the That side housing business. the the are go and of you value is through contract what's numbers. higher homes, big working of homebuilders tends can delivering obviously in

painters are say the the So see. contract do-it-yourself doing that better than you business would

And also there. so moving that's gains and market, positively. share and chunk big benefiting the getting of from that's that, we're some We're a

quarter is to low will little second season I for anyway. bit for we activities. So continue get when The other maybe a be with third ourselves to quarter that's less typically fourth coatings, good start maintenance And coatings than quarter. think prepared and

those I next construction So But chemicals expect On on would improving. going continue we're you're ready season. see strength. run to volumes polyurethanes are and businesses, year's to to into

You even saw quarter. to that limitations had even with that some we downtime the turnaround in

Inventories under You are control. improving. saw volumes well

positive you're impact to I going of the there are and question be flow see if next then this of will some quarter, line. it think bottom So that there. a to will much And cuts rate happen how quarter interest that

Operator

the line Frank Research. Fermium with of question comes from Mitsch Your next

Frank Mitsch

to hear gave gotten answer I polyethylene, first concerned through materially fairly happy came garbled. that believe answers that But the and And you that sound on the the quality has better.

in glycol was on million restart, the and about quarter. also an polyethylene in that increase. in the but as just in respect Obviously, very the I'm through, and since the third quarter your quarter didn't in was of to fourth third go wondering, to the curious I June you general thoughts Jim, million with what $XXX So it April would there terms were accurate pricing And forecasting add July are then $XXX and price X margins? expectation

it that quarter? You're the third $XX it's sense in which makes as quarter, anticipate up, today $XXX million you million the fourth ramps coming through in indicating would that

James Fitterling

microphone They brought thanks. probably Yes, me here. another

America, North got So stick quarter. going out going around first -- July got understood world question plus X about for and on I'm if in except you're price out to or in see Argentina we've is That and wasn't pricing, well. the market. to sorry we've the August the answered prices X in plus everywhere the

So price come going to is through.

that question the all much through. is how of comes Now

we pound to see I in margin we've that the going $X.XX we're estimate into put as put think per improvement. what

costs come So net mentioned, the And of price. will up ethane think I quarter. I as through

look think $X.XX the I if it quarter. X% quarter-over-quarter. through will or you come up

net hurricane on to outside inventories say I are think of I have the there's pound America. increase, like volume And that. that more predict, cost but that I'd we margin can't ethane in we will you're per chain North the low. see going supports activity, world the $X.XX So in a things increase think derivatives levels around that inventory support

that's got got start-up the happens going the year-end, guess up mean, glycol, expected expect $XXX to could. $XX and part little Obviously, would up, some to fourth it safety a product ramp-up million the Could go from smooth I mix, comes quarter built So the seasonal I million. on get we've I we've more XX% through. When was $XX too. it it back glycol it's of in to slowness. million and to there's ramp usually bit get stocks that that of and as to to through than

So our ramp that's probably got markets. the quarter, we when estimate right first the which some of into to more across the But some tend get would volumes into now. we've what is in it expectation higher is

Operator

line Alexander comes question from Laurence next Your Jefferies. with the of

Laurence Alexander

significant is you your do that function I movement there customers discussion just how and industry shifted your new restock potential has the might they tariff you in response that tariffs, towards to if on see how wanted follow in do around how structures evolve, a advance? is think triggering the up cycle with

James Fitterling

to the of going tariffs. what I there's people all And I don't advance stocking around and yet, primarily think the in policies election Laurence, because stick. has actually think are uncertainty on started anything

same same the for of China by the its impact. little it planning know there's going here doing going . We're for until token, U.S. with economy on I doesn't what's from think scenario election. I a standpoint presidential yet view the own better that the happen gets -- think bit incentive feel an to do a what to it's to look at

mentioned, parts markets. activities I of being in the because that different into challenges are of going -- see things As antidumping we being there on dropped volumes from world

of work behind on lot going the a there's scenes. so And

that seen stocking think end I will or any that because of picture I uptick a now, in would by the volumes right clearer that. the say of year. get haven't for we'll But I --

Operator

the next line Your comes John question of Roberts from with Mizuho.

John Roberts

Jim or Jeff, I'm the looking exhibit volumes. at in Slide on top X

had I well. for If think, the and will volume. year-over-year fourth seasonality, last comps. more fourth easy be as the quarter normal comparisons quarters, quarter have have that we X You've then third you relatively in begins, challenging But the year-over-year quarter in down the

James Fitterling

I that Normal still year. think in you're will determines because goods, and in in downstream seen. that what going fourth or X turnaround durable not. the be to Industrial quarter should question you're I going demand to the in if see whether is see be John, demand Solutions being be And going and remember last I back, you're out I&I, and think of to in the up. . we don't forecast will of based do up much of terms up, Plastics would see expect on on up coatings, glycol PU mark had uptick we've see time how plastics. strength, silicones seasonality, Silicone, but It I

Operator

Sachs. comes question Duffy from next of the line Goldman Fischer with Your

Patrick Fischer

questions. Two

out you made quite volumes their comment QX. the seem well you a of that your A material paint companies business weak. did First, lot in Jim, raw coatings and thought have come

that other billion eaten that? year, And And on much just than then forward? kind which has is assets is cash for almost normal. and you $X What this the cash so can far higher happens of flow So that? triangulate what Jeff, liabilities going of the statement

James Fitterling

On I'll coatings part is mix Duffy, coatings. it. Yes. of take

with in done coatings, are space, that think in the customers I the we've quite who in So where, mentioned, addition to I well. contextual as contractor and space

improvements, job We has also infrastructure and share that of and on delivering saw done side? great continue getting on Jeff, paint uptime to have been their has taking driven along the that's great assets see cost I across position. there. the advantage good gone a by of cash innovation think been their on that side response market traffic and projects had team also good running well, gains The

Jeffrey Tate

Yes.

The we primary to and you're other period. the right. had some assets tax In driver reassessment a is tax there of liabilities, payables of over related audit in reduction terms long-term our

may As as specific even item of we quarter, significant well. first had you a more to our X regions in recall,

unique from somewhat vantage that were things those point So here.

. So forward. it should stabilize here moving

Operator

from the of Citi. comes next Your line Cunningham Patrick question with

Patrick Cunningham

the lingering this more strong as that maybe think expected in the of recovery characterize was Did pricing couple the on not Or bit demand issues? of there over just I I'm curious revert is pricing as siloxanes on oversupply in the Would Asia. months? you a just past environment quarter. and -- confidence pace as second

James Fitterling

Patrick. the in Yes. think slowed. call, Good you the is on players the weakness nonintegrated say, of integrated players, the I question, difference additions there. siloxanes nonintegrated you Capacity I have that mentioned from overhang see between some the as capacity Asia and is in and

to derivatives derivatives. way. downstream downstream market We've merchant less think to into on siloxanes doing been downstream improvement that that we Really been those move pricing some we more into into year, drive well, in and to see going silicone which sell products, as So to investments and all we're have siloxanes. and volume start do the move trying we growth continue working that in next to make

you're seeing was through to That in come And big start of drivers. the X the the volume that in second quarter.

So consumer big things that plus was fact seen driver, in downstream improvement a in that you've the demand an electronics. like

strong You Health has a solid. still pretty been Care good side and automotive commercial Personal saw a on which products. business volume pretty the drives of of lot and construction things, of

the a than brands year-over-year, to little is little because spending see maybe pharmacy. at and growth Mix balance consumers at more we are quality trading the X%. good grocery a pressure trading volume little bit kind of trying and they're their say X%, under bit of I'd a as store bit

Operator

line next question the comes with of Leithead from Mike Your Barclays.

Michael Leithead

Jim, for DOW lot investing a obviously is just bigger picture medium-term a growth. question.

of overall a thought laid you and since probably the same backdrop worse You've been time, materially demand that But the lot expansion than out or at targets. about anybody XXXX has at time. mid-'XX has XXXX

you only longer give and economic pivot is of mean pause months your rethink growth sort investments? now. XXXX of timing any near-term I all that expansions medium-term scenario? to as you some So weakness, closes, or away X of in lower Does need any Do sort between for these of that gap at

James Fitterling

in the in place. volumes for But takes XXXX, plastics frame, would we longer-term a in time the to seen it and XX% it a make when to and and get increase question, respond plastics, what's It's plan think these increase And see good I a obviously years in at example. an you start look Mike. market ask investments. you take happened to also this to even Since can't you about capacity we've have to

. the You've got take to mid-cycle cycle up and get advantage ahead in of time. the of to place

that's on there's where that's higher growth move value rates. the are to cycle, into we're tried for investing. at That's So got dollars going going. there. through plastics, Solutions where this EO specialty silicones, look and typically, the when the growth the derivatives long-term a the at Industrial whether be asks, point We've in it's there but is trends higher that long-term the Whether the plastics where to question we've is to common say everybody and differentiation we're whether that's continue of trends to areas

So those of your markets are most expansion. consuming capacity X

more move MDI with polyurethanes What housing we've containing the more the market coatings, more improves. footprint downstream rationalizing doing print PO on been being components. in able as markets, the market commodity-like the to is obviously, around And less higher-value

back about at good long-term the feel direction. I not mid-cycle We're So yet.

at As on path another step-up get the margins. in there's to a once we $X X and $X comes earnings you get in back billion frame, peak, step-up And 'XX 'XX, time to there's to mid-cycle, then billion mid-cycle peak. to

Operator

with Your next Wolfe Chris comes of Research. the from Parkinson question line

Christopher Parkinson

there. what of of of are Jim, in some factors the billion PNSP. dynamic where moving U.S. we I of obviously a Can integrated to in the just NGLs. current terms understand you're there expecting upside lot if mid-cycle for export margins, insights stick in trends, you PE SD But terms your given is, offer just $X

would in of getting that color helpful. kind be of any back Just terms especially

James Fitterling

Yes.

range that on much Americas as XX%. to $X.XX. peak in Europe run in peak but mid-cycle range, being the margins $X.XX. that to global being the as range from $X.XX typically globally, average $XX can margins run would from $X.XX the Europe, to When -- be run mid-cycle Americas to like XX% of maybe And and So XX% tend would more in gotten million we've maybe

So outlook that's of kind is. what the

And that of is say adding. I'd of the $X some debottlenecking and things capacity of upside, we're billion that

in billion expansion. Tarragona. and with So some about from it is we've on And we making the margin products and will elastomers of $X million things done tweaking from come higher-value rest $XXX additions announced available, like then of more the

Operator

line question Your from Yefremov of the with next Aleksey comes KeyBanc.

Aleksey Yefremov

at thoughts same polyethylene on looking polyethylene you Do for do level this Jim, U.S. is roughly demand? up this leg think in XXXX, demand at ACC numbers, as another year the XXXX, North have any American there's observation? you

James Fitterling

do. I

billion see North American X of plus to we when exports the starting domestic we're north getting demand, at demand think total pounds. I look

So into of U.S. I product exports about into was export, I historically, you're would XX% the that in running is look to would move also of Mexico total the I data, moved a a same U.S. at XXXX. look tend we been this Also, Mexico, demand step-up. not we way Obviously, demand just mean, big but XX% have at driver market.

Mexico moving And of X biggest reshoring as into been increases I area. consumption with that mentioned, manufacturing the in has

So the in I think we're U.S. seeing good volumes this year

steady rate. that see improve to think I we're to continue going at a

Operator

Markets. next from the Capital of Arun Your Viswanathan comes RBC with question line

Andrew Riker

at interest thank post transcript you Dow. do Q&A. issues investor your time, our our quickly our and make as the early your possible so Also you apologize to to to part as do We This we you, a addressed. for sure concludes -- audio website, start Dow. were Thank in everyone, in as we joining of appreciate we'll the today interest reminder, Thank understand the Yes. we and call, some for issues there is call. a your and for everything technical do and for

Operator

now for your disconnect. This Thank you concludes call. today's participation, you may and conference

Dow (DOW) 25 Jul 242024 Q2 Earnings call transcript