DOW - Earnings call transcript Q3 2024

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Operator

Greetings, and welcome to the Dow Third Quarter 2024 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded.

I will now turn it over to Dow Investor Relations Vice President, Andrew Riker, Mr. Riker, you may now begin.

Andrew Riker

Good morning. today. joining for you Thank The accompanying on webcast posted through are website. provided our this and slides

I'm Investor Executive Riker, Jim Tate, Andrew Dow's Financial Fitterling, call Leading Chief Chair are today's and Chief Officer. Officer; Jeff Relations and Vice President.

financials, principal and otherwise our comments cautionary applicable, the further public where in earnings filings statements contained specified, slides. and about subject news to for Please note, release items. forward-looking risks Please significant are Unless our the contain all and related uncertainties. statement refer exclude information to

We will news of disclosures GAAP and also that refer measures. earnings A on associated and release to financial the reconciliation non-GAAP posted are other the website. are comparable most in slides contained directly our measure

our call. results, regarding today. a third will Jim will and will call. X update Slide macroeconomic questions. investment. modeling we asset share On review Jim following an operating on key updates close quarter performance today's environment quarter and and on your the some growth strategic will then progress we announced that, review is our discussion Jeff fourth on And the for provide Dow's segment followed our financial agenda take the guidance, by position

the to call let Now turn me Jim. over

James Fitterling

Slide Thank you, Andrew. on X. Beginning

Our demand strong the growth cost advantaged regions. Americas capturing footprint provide competitive in and edge, in continues to attractive markets

is fourth soft as of year-over-year successfully outage quarter well and running delivered a cracker Texas, delivered volume consecutive China, despite primarily macroeconomic environment, has In in our the in Dow well. been unplanned quarter, third We this Europe restarted an Team which as growth. and

period ago local led X% Specialty prior were Volume periods. we & the $XX.X States prices gains by Infrastructure. X% and year versus third saw Sequentially, higher the the This Intermediates billion. in ago & Packaging and the quarter is versus and sales increased in United Plastics and Canada. in Industrial demand up period, year Net

Plastics declines to year-over-year Coatings. were & as price due Performance segments. gains offset by all in local was in Specialty minor Materials & across Packaging decreases X% Sequentially, price flat Local down was

was Specialty cracker EBIT partly higher Plastics, year-over-year, million in $XX impact unplanned activity. planned the Texas higher Packaging were & in maintenance offset and Operating up integrated by of $XXX outage margins the million, which reflecting

Cash $XXX flow from continuing to down operations supply inventories disruptions. growth primarily to both higher and million, year-over-year, sales was chain due support labor-related

for quarter the Shareholder $XXX and including dividends remuneration share million, was repurchases.

agreement hydrogen In of progressed PathXZero long-term Saskatchewan. long-term with growth Fort supply signing in we addition, for for strategy, clean our the including a our Linde project

tons Circulus. of the will of completed This annually capacity also U.S.-based XX,XXX acquisition portfolio. add materials recycler to polyethylene We metric of Dow's recycled

flat. the year-over-year Now was all volumes. performance regions on & was turning was polyethylene X. which In increased regions to segment, led except by for all by polymers as operating Latin segment offset local America, higher Plastics higher demand polyethylene Packaging Slide price in prices lower our Specialty flat functional year-over-year Volume in

I mentioned year-over-year. margins, outage Operating was driven by of $XXX earlier. $XXX of integrated primarily increase partly by higher the million, the unplanned impact offset This million which EBIT was were an backer

flat to & Intermediates price Moving Local the Industrial was segment. Infrastructure year-over-year.

third-party was volume in by polyurethanes driven were to a due which X%. down addition, In following construction force and This lower chemicals, volumes MDI, in primarily a outage. was majeure supplier

lower Operating equity by higher integrated by year EBIT offset maintenance improved which were the planned decreased $XX driven partly million Results period. earnings. were ago versus margins, and activity

material year all by businesses ago and by Performance price gains raw across partly in volumes. period, higher the in Materials were to geographic year-over-year, X% local volume EBIT declined higher segment, And million was up driven $XXX compared Operating down which both regions. offset & million, was while $XX with costs, Coatings the

which by positions, leverages defined Slide Dow's asset footprint, primarily differentiated the of in our and strength low-cost to X. is feedstock portfolio The purpose-built Moving Americas. strategic

investments cost demand where a is growth and resilient, in higher-value we competitive are have particularly Our advantage. regions, and businesses concentrated

past the few select the our taking commitment assets evolving operating aligned market higher-cost we've by demonstrated dynamics. actions Over with best to years, proactive with with owner mindset a

we targeted than select million, Since of sale shutting announcing business more oxide XXXX, polyols XX propylene including we asset unit Freeport, have with $XXX footprint merchant actions. X the undertaken Italy, our These coatings lower-value PO of rationalization to finalize XXXX in our manufacturing in the for exposure, this in Texas year. include fourth in laminating quarter asset which adhesives our and down expect our to sites global capacity, strengthening of reduce closures,

primarily actions in have the Intermediates EMEA region. and our & Industrial on focused been these Overall, Infrastructure segment

current And Slide the policy continued for persistent dynamics policy. lack consistent ongoing peers. to coupled in been demand soft in across are alone has in and Europe. world expected statements economists, X, recovery provide enough regulatory top this with Europe, EU our the absence industry. leaders, regulatory be long-term including of of parts demand, On markets resulted competitive of while clear, market acknowledged to swift in challenges in This upside challenges by impacting have many Europe unlikely other is the and is serve, the our These we government

of those and in we've EMEA a sales region. business. for options approximately review currently value-creating polyurethanes select assets, consists includes these dynamics, XX% these the of in assets, strategic Given our our review begun all European of This primarily

expect to this We review by complete mid-XXXX.

Dow's engage invest leadership the regarding on We the attractive associations, shareholders. both prior portfolio. and opportunities industry's as us in our in long-term as with review, This region. Decisions growth and strategic for the the our to governments, to most will similar our create through continue to focus improve value trade strengthening directly global enables competitiveness to overall actions, well

to Jeff review to turn and outlook it I'll over Now guidance. our

Jeffrey Tate

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

Moving to Slide X.

and as recent impact XXXX. spending That demand cuts Europe the monitoring inflation. been stimulus positive consumer said, remains the U.S. and We with as China some manufacturing well in China. plans in could which activity, the past boost and pressure some by the persistent economic X we're momentum across in pressured markets to decelerating end Europe Global experience PMI continue of muted months, to greatest and regions, has rate for over provide

Looking In in America X remained decelerating year-to-date. specifically resilient exports our Demand PMI is robust market in last and month. lowest verticals. demand consistent despite with North point Packaging, soft, are Europe the across domestic at manufacturing

China's manufacturing addition, in In after in levels September to PMI returned contractionary August. improving

year-over-year remains prices consecutive PMI the the Infrastructure month. primarily new Eurozone in decelerated XXth in housing residential year-over-year construction U.S., In demand, X.X% remained September. for negative soft, construction, home to and declined stars in China low.

seen remain negative in slowed in and the States the consumer the Consumer reflecting spending declined globe, United weakened across month. challenges. has confidence China consecutive for Europe in affordability We've fifth

year-over-year production globally. And in reaching a X-year well the reflecting in consecutive due auto low has sales mobility, tariffs China softened Europe. demand And new in September demand fourth exports the after to August. the were in decreasing August. car registrations September imposed EU, slightly as in U.S., up declined in month, as auto declined after In domestic in for weak

to on turning Now our outlook Slide X.

billion, earnings plays normal We quarter seasonality expect as $X.X fourth be quarter-over-quarter year-over-year and lower out. up to approximately

a feedstock the segment, lower costs In into drivers Plastics be headwind. the margins higher & revenue Specialty will Now from integrated and stemming segment. looking lower licensing Packaging by sequential

fourth of we in steadily add-back quarter. to expect in event our wrap unplanned This we throughout will at July, cracker an and of million end operating the quarter. generate fourth approximately Texas-X the rates quarter, an the restarted Following $XXX third

We lower also Europe U.S. the maintenance activity multiple sequentially. in across expect tailwind Coast along to planned a and sites Gulf provide

ongoing in to mixed. & and Industrial as as expect Demand the decline. segment, in building Intermediates the at lower, remain well markets fluid end plant Infrastructure uptick conditions this In Louisiana of the seasonally ramp seasonal offset deicing our for will be but we demand operations construction

anticipate tailwind along $XX Gulf plant maintenance due In Coast. a we million addition, lower the U.S. to activity

across Performance In the Coatings in most & growth downstream continued we end see segment, applications markets. Materials silicon

be ongoing However, weakness in expected offset this the by property sector. China to is

seasonal addition, is of be expected $XXX headwind for million. construction In markets a building lower to approximately demand and end

investment Slide over few strategy, growth. the execute continuing and Dow very positioning industry deliver market has By a value Dow past has X. volatile years. conditions for we our are Moving even priorities, Team financial our as to advance our faced built long-term on compelling playbook, opportunity, to our

the financial that to and will flexibility our disciplined emissions continue drive in earnings, to built areas underlying investment have growth. reduce needs raise we advance Importantly, customer circularity

XXXX. financial Dow ample long-term debt no maturity our strength, have a credit liquidity profile. fixed has substantive to we relates investment-grade of until it all and rate, a and strong is As our Nearly at

generation to expect cash our of unique enhance also flow levers. Dow cash the through flow to near-term We execution

are solid strategic assets. And the for options of nonproduct infrastructure evaluation our making on we producing progress

we and in previously from see we further progress generating $X transaction, mentioned, this As billion yet year. proceeds anticipate expect to over the

Notably, foundation strategy. began, growth long-term our project of on is the our and approximately advance to us the allows more to XX% more to construction flexibility and we XX% work than received good are the financial making quarter, strong Fort progress than expect in in filings receive Dow's third $X.X incentives, XXXX. complete. Saskatchewan. Major the in project, PathXZero by our capital billion tax deployment of with schedule cracker Aligned cash for team

by EBITDA. Our near-term capacity than ] is silicones growth full projects of transform to more approximately strategy EBITDA XXXX. $XX expansions our more This [ than this deliver at that to the run in million billion of And year million EBITDA of rates. includes $X deliver deliver annual would remain $XXX underlying on track waste expected

quarter, jacketing. recycled circular that In post-consumer the to growing REVOLOOP new incorporate we and added recycled to portfolio. material This third plastic our products resins includes cable

ENGAGE backing. for We circular the also first tile introduced carpet REN elastomers bio polyolefin

to And with over Jim. that, call I turn back the will

James Fitterling

softness profitable invest Dow discipline, Despite positions Closing to areas markets leverage of our for persistent advantaged and continues to strength, and cost with XX. operating demand on across Slide end long-term capture growth. many regions,

with owner the and creation. XXXX, review that than assets European today's long-term on shareholder best value on a announcement focused taken we've undertaking more Building is asset-related since our we're of consistent strategic actions select XX mindset

expect we're actively share of to Dow to the and by progressing levers, cash end more the addition, unique year. In flow

our annual to allows thereby conditions billion investments, is to and our boost greater in Our more than Dow returns improve shareholders. long-term market begin deliver our growth as us core earnings earnings enabling by additional growth benefits $X is from strong advance financial foundation solid XXXX. which the poised position strategy, full a to capturing to in we

with Q&A. Andrew With to that, I'll to turn started back us get the it

Andrew Riker

Jim. you, Thank

our I our like questions. your to would the following both apply on Q&A. move prepared that remarks to you and statements remind forward-looking let's Now to

provide the Operator, instruction. please Q&A

Operator

question Your Stanley. Morgan first comes Instructions] Andrews from Vincent from [Operator

Vincent Andrews

about How Plastics fourth the Wondering for ask looks pricing should I pricing. the it correctly, of flat If December? the correct? October be little about maybe and expecting give bit basis, like reading that you're is are Packaging guidance of pricing just traditional it? thinking net in & Is Specialty cadence on if a of you outlook a up could for the then terms And I'm in in quarter? back there sort and November

James Fitterling

outlook some yes, you're feedstock quarter, U.S. overall the for pricing very Gulf I you've here costs, reading that some expectations Coast. think Vince, feedstocks obviously we the got it might for higher competitive still We've an see but where flat in got correctly.

got we've year. to ] see [ up think $X.XX movement the would is pricing in then of our and think November. when I view October there I in soften announced end the and tend moves typically, towards X the that's And things out for we

Operator

question next from Ahmed Alembic comes Your from Global. Hassan

Hassan Ahmed

the question guys doing you work a that around are sort of Europe. of some in Just review

see with specifically regards get out. a sense of guys just I'm polyurethane to to trying sort of of you parts the polyurethanes. all talked better cycle how sort panning about moving the You

some Obviously, supply about side seems destocking in change the hands assets to severe see we've a but The polyurethanes, polyurethane bit in particularly market. seen the global or was tepid.

through the of sift polyurethane do how parts, moving out as So other sort you side? all of the market on you these coming see sort of

James Fitterling

lot Hassan, I recovery really very polyurethanes. durables in for on add been in still under and Europe. on some which actually, a pressure poised going of what's markets, in a think top I automotive that would of we're construction good drive because automotive has

turn waiting people we're those signs no gets stocking has moving any agree and that I there's obvious the that course. into destocking economy that in its But I with run for you, segments. think So there's

Polyurethanes capacity And positions And is shift move. assets Europe We've a has pretty good got those It asset thinking we're nothing downstream as II&I, the focused is globe, to business, really to I mentioned, our markets. up and really good in a cost the in mostly do the actions our footprint XX business. there. lowest is tighten really there. assets which a diverse far get portfolio so with across on about

as well. business coatings business think So I and strengthened, it's also both the polyurethane

Operator

Fargo. Sison Your from question from next Michael comes Wells

Richard Garchitorena

If What your Mike. should margins for on in basis on I global it sequential think Richard could we that might puts And rates? about look on EBITDA declining are XQ, where is about should are just early, headed we comments global P&SP, given P&SP the key for This be export at? to should know a integrated growth shift be I you but XXXX? and margins your back into and how thinking how takes and footprint

James Fitterling

Yes, question. in we the even the downstream. issues On sorry. we Michael, Good at good -- -- I'm we despite Texas-X question Richard, volume third still see strong growth -- have quarter, P&SP,

we So that a happen. lot were pull make to of to able levers

downstream and Demand good. of that we the the because dock demand going with bit at quarter of say has overall, had a strikes were would is at time. end good. still been the little volume I on a But exports the of slowdown

are to and up continuing are running tighten assets strong. rates operating the advantage cost So

look continued growth see going volume. into we think As I some XXXX, to in forward you're

So going next volume benefit rates. higher see about organic some at going We're looking operating from year. we're and growth X% to into

from maybe about to $XXX consensus So million billion a add would basis for that. XXXX, of that $X.X

We full Glycol-X the up got year the add back we outage the had events. as quarter. Texas-X plant in X ramped as fully well third We've have unplanned for being

then the million $XXX volume add projects on $XX strong million Consumer a And silicones from the million [ specialty from that's applications, year-over-year there. polymers ] And those So is million. growth $XXX with from our of Thailand back About about third in in investments functional debottlenecks, had Coast X% about million we've Asia. from investments, and another in and PG growth of incremental polyethylene debottlenecks. ramp-up And alcoxalates growth capacity Solutions, about got they full there. the Gulf quarter, $XXX X $XX in so coming downstream U.S. that's growth then

some you've the depending window. all, $X got then billion all that that's and about upsides So things in higher, downsides on and within happen would

Operator

from Zekauskas Your comes question from next Jeff JPMorgan.

Jeffrey Zekauskas

autothermal When if you production project, use have the that you in from Saskatchewan Linde. reactor a you'll different think -- about your hydrogen, process the

if So And much? is in higher the production is so, than ethane how or the costs by if in Fort cost lower it are same, Freeport? Saskatchewan

tons still to of the do in on, second the expect And you secondly, of XXX,XXX polyethylene half U.S. bring XXXX? I think, in

James Fitterling

is, question on answer to XXXX the second to question the additional Jeff, incremental your growth -- answer second yes.

and ethane our say world Canada Fort of believe in on I be ethylene of cost we'll the Saskatchewan, have. advantaged terms In would some will up be the in Fort, in the we best that we

So I to be it's going similar. think very

little autothermal hydrogen higher furnaces. have, fire into the in a do to that the We cost from produce go reformer will obviously, running that

back of of to However, and sequestration, that market able get going through we some back Scope we do X that with some be selling through and are COX and to ethylene get emissions. the of X X

Texas-X cost in you're So our going globally. higher net-net, Gulf is than which Coast, or lowest think returns I the to asset see equal U.S.

Operator

from Capital McNulty from comes Markets. BMO question John next Your

Bhavesh Lodaya

John. Jim, this is Bhavesh Lodaya for

world, tariffs in appears general, to more the see being put likely and going duties and the is So U.S. that and more in it more place.

low-cost polyethylene, in Europe, required. very have the you you but there I advantage You export believe are also where markets. this like is you the In are actions about U.S., regulatory what reliant alluded on to spoke when a commodities

you do for more world, this new So we enter era of across think how of the duties overall? Dow out plays overall, source if that

James Fitterling

Coast large importer some in that be businesses U.S. tariffs the very to markets, participate because have an and here. that is see think, strong the in it's still a And we competitive importer I out are particular, time. advantages going the of in. we look, The in we an China general, of exporter today for net we some quite still of Gulf

player. I In that So the market in domestic to be exist. think will of the markets, we're most other a

we're So for the we're in assets that in for have Europe, for China in Europe China. we China, and

lot of a tariffs. There's going around on discussion

some of in crosshairs related. not national the issues we're are that typically think of I security the

doesn't are we'll wide could we're a mechanisms walk adjustment And what that. to open impact say, So stay form them. a and eyes to that -- would will border also have tariff I on particular considered us. well, a as happen be I then of carbon so think with through going

Operator

from Your Begleiter Bank. comes David next from Deutsche question

David Begleiter

the under you in they how Texas? if MDI on Europe Saudi And much? look European positive? EBITDA plants do And still assets Jim, would both are your so, review, MDI your of Europe, in from and supply if close plants you to

James Fitterling

number They to on cost have positions I market. a specific right positive. in but EBITDA you the don't good now, are the European they give are Yes, European assets

believe at looking believe value-creating preclude I to don't down going value-creating we're is but all I everything. don't we're a shutting I but MDIS, to want look opportunities. that going at -- anything, opportunity, Again, to don't be

Operator

Byrne comes Steve from Your Bank from next of question America.

Steve Byrne

$X needs. made waning view, ability billion polyethylene? this [ a higher customers costs those is presumably And for contracts gives low-carbon about Can in pulling enter P&SP comment contracts? into for you of a chunk for confidence to XXXX with your you ] Jeff, the EBITDA the project, guide is your out customers returns? but you are get gain in Are to days? offset give by it longer-term Alberta your -- circularity these with have you sufficient long-term intensifying? is needs, Or they to that Your what those

Jeffrey Tate

that our our strategy, million Yes, any be feel [ to would in Steve. still no very that to see the now look there's we for $XXX least From right the assumptions us again, transform that earnings at ability differently. And able waste question. that generate, we would ] by XXXX. confident good additional our at in overall have standpoint, of marketplace

Operator

comes from Parkinson Your next Chris from Wolfe Research. question

Christopher Parkinson

and of Some balance trends? and end third just and the and Street of that take back into of step And look be quarter year-to-date cash puts facilitating the towards just terms any the a XXXX? Can terms to your at going takes of we flow take the a just commentary the sheet should pertaining as we in fourth growth. the progress in the framework considering

Jeffrey Tate

for question. the Chris, thanks

second to look which we we which which similar at an third quarter. for conversion terms free operations, in generated cash range when the us, million flow almost we in positive For from quarter, $XXX gave led pretty us rate, XX% quarter, is that cash flow in the had of actually

we've there. some So stability seen

and puts is other of at comparison couple our conversion days, to quartile are A that able in our is to cash cycle maintain XX we've important been think that takes I peers. which top

And so been able that pre-COVID versus we've that's an achieve X-day improvement to levels.

Another thing of the no at as balance XXXX. liquidity another almost $XX have date, is to billion and our due that's $XX important additional we we have debt maturities subsequent well gives $X here liquidity us that billion that as total cash of billion, until

that And forward. remind those and year, each maintain levers cash Chris, commitment make Dow you the levels continue and we to other deliver we I fact able that and is here thing being still to commitment also cash would the moving at the every of billion of $X least of, unique to

Operator

Your comes from next question Josh Spector UBS. from

Joshua Spector

$X look assets, maybe we those potential. If XX earnings versus than was of you've asset Or changes be much thinking we in? all last this done that relation the in And closures? I the portfolio expect? around to what or how Dow earnings there talk could in less where the earning impact a in and about you've at just billion about the some negative that some actions smaller of that building you of is bridge we done wondering about years corridor, it's of EBITDA talks talk if combined. should billion what more I'm about the $X the X,

James Fitterling

Josh, good question.

operating doing rates, cost into capacity able line so assets bottom are look higher in you'll you it low. been of to and our typically at all We've what improvements. at think should run rate bring lead to terms I that see position to keep we improvement that lower-cost in them and

had And assets. we've although happened costs of and some these 'XX, XXXX getting out with of have in associated some these

that as some You'll impact XXXX. forward see we start into positive of move to

that, of forward. We're run lower are existing the assets typically able assets harder. move to cost as Those we supply all

So more I the think footprint, the it's up more attractive. a tightening of making portfolio

we year-over-year, in rates points, points. we've improvement look an some you of we maintenance were the we XXX out where operating basis because If moved and quarter. in about In quarter, third had activity at XXX up that the basis are about was

move have impact to continuing will an that operating up line. So on rate bottom

Operator

Your next Vertical Kevin Research comes question McCarthy from from Partners.

Kevin McCarthy

one maybe more narrow. broad Jim, one X questions on and Europe, one

stands press of in to think the the Just some demand and to onerous margins cost remarks anemic release. due energy in you lower broadly, reason and regulations spoke in higher that are the that I region it the to prepared

if lower So on a basis, I regional Asia? a would my the to general margins segment rather be one. to question be, guess or would you Americas than report how Europe even were Number basis on relative much

as And strategic the terms in or you of then go review, two, mind, the potential through gap? that number do that of in margin consequence narrowing financial have EBITDA you uplift

James Fitterling

on good Kevin, Europe. question

higher, they are come back bit. energy down moderated and a costs While have

their are just they And we're the LNG right new before. competitive to they've going base -- had going that based I of Russian import being gas so think got and of you're diversified they've on kind level away And at see -- floor now. they've from that Europe, that kind into relative to

got lower. positive positive. energy think costs I what will has sight So there. relative of a be good a to line -- that's been the We've Demand

consumer I obviously from slower. been has some as to Automotive seen But has think, have construction EVs they The will to know. slower. obviously, has that. we pressure been adjust I think import

were, we say of cycle businesses, Europe. the the where in at when cost now in look versus low I biggest the you delta point are is the think obviously, would at the XXXX higher say, we right and where I position

pretty to at easy look it. way take I think a that's a

are and and about These EBITDA their mid-cycle businesses, polyurethanes margins mid-cycle chemicals, XX%. construction

businesses portfolio higher we at returns And money to rates. downstream so I that in growth where and is invest think our options more higher look here have can view

we're XX% our that of make about about assets talking existing sales. polyurethanes, EMEA with up European The

Operator

from Cunningham question Patrick next comes Your from Citi.

Patrick Cunningham

the on And of perspective production idiosyncratic of Plastics a just So the related policy need run treaty, risk governments plastics particularly organizations assets? cap? to across regarding backing positioning you UN from European and sort -- U.S. see to with would the and to assets, review trade then these Global what the the you are maintain

James Fitterling

questions. good Patrick,

First on I clearly, European policy, differences. are couple there think of a

So in critical. energy, focus I on do need think, what to forward energy you is a be competitive to

Also, would Fort to competitive hydrogen Fort I think able look at, run, good market. to a and on that be Europe's circular Coast X Canada position and benefit make at a with and and products we're with ethylene X Saskatchewan X and from order Gulf the comparison hydrogen Scope the get hydrogen. economics We emissions project circular call in costs also selling U.S. from into a

that the carbon means or alternative Green it deal [ low is electrolyzers energy credit with written green [ made get U you can ], energy. for way says made The ] only today, hydrogen, which by

I just X to simply what you to electricity, Fort. give happen. run electrolyzers on would asset, to the economical, a hydrogen have that make were happen make It's comparison won't have to if the running to hydrogen green to run not Fort have to it gigawatts and I of all have If in Saskatchewan, I'd green

the terms There's only alternatives. uncompetitive, have forward decarbonize for European blue not industry just these table And all consider of on were no now far on seen there will projects hydrogen. that in moving industry and other carbon not projects helping so the forward so capture now to no things moving decarbonized, probably they'll you've are are that

international the or agreement. alignment around In There that world States, United no progress. on making plastics, in tremendous the of is terms in caps agreement binding I legally the production well, think on bands certainly we're

all we're we're not process administration, the think the but positioning of the yet. surprised end of shift We by in this at

the circularity the the And pollution, we solutions, are forms the continue advocate with focus of is to on plastic policies, recycled responsibility part we and dealing situation. recycling issue, of on which schemes, extended focus content mandates, that which producer pollution all so

footprint with Plastics use. the there. will are footprint. are Fort, we X have be making X the Scope sustainability footprint. to lowest to nothing And use, -- the alternative and out no like to carbon them do They're at sustainability products emissions that able to as to easiest cheapest they're They the the convert best touch we're going X

Operator

next from Research. question Your from Fermium comes Frank Mitsch

Frank Mitsch

question the Q&A What early I I'm enacted earlier an your Jim, specifically would polyethylene XX.X% XX% answer in curious, to competitive in that U.S. with the Coast siloxanes, increase offer imports. Gulf if advantage. Brazil appreciate seeing And the an the XXXX tariffs also demand, on just helpful. supply from be and to perhaps between region? terms interplay in be at may look of that you could on

James Fitterling

good Frank, questions.

with with as making Sorry Royals, about the the it you [ Mets not well. ]. I'm there

manufacturing in domestic that [indiscernible] to of XX% to Brazil, meant I in the I Brazil, terms the in of XX%, in tariffs are you so a base. see tariffs think like economy have of are trying think, the that. case protect you manufacturing you to you I And think keep to look XX.X% at do

for reference that's heard anything manufacturing tariff mindset States. United think you've that's into I to United that neighboring to resort driven yes, we're the XX% when in base a into think maybe United of of the States a country, tariffs trying imported, but States, the not get by to I here a

economy. local to tariffs materials protect be all so of countries and And needs around for for not we at their import of trying the trying that world completely mercy are the the manufacturing for to see

see of and on like that think continue a to lot to I that. actions focus going we're

saw On and a tightening little siloxanes, improvement. of a we bit little bit pricing of

a away. ways think I we're

margins there's in area negative that's in cash for opportunity rationalization. some still the I think We've Chinese where we're now. capacity got right

The downstream is growing well.

is The year use, vehicles up outlook and well. back, construction were been we pull growth has to look And about that, the been mentioned, is X% I to to year-over-year. downstream we for of this a at strong, it X% slow, vehicle though to be market as electric like see you're I production think demand. good, year-over-year even like XX%, The drives going when going continued the silicones that projected has on lower automotive be downstream. that come high-volume As that's XX%. in lot And start when a see in you

those it's I markets are cash-negative of down. be combination the think that taken in to big come So volume having well as territory a back some as assets

Operator

next Mizuho. John Roberts from comes Your of question

John Roberts

got you've in Jim, integration chlorine Europe.

separable cab how in the Europe decisions polyurethanes looking the you're for So at versus are assets?

James Fitterling

John. partners our own close chlorine to with contact Obviously, in not, without going with but do we're Europe. They're not assets anything our also

a for eyes so keep and we'll so wide to critical us, close that. we'll And open is make on eye PO integration sure that. Chlorine we're

Operator

Your next Mike comes Barclays. from of question Leithead

Michael Leithead

about for It maybe like -- [indiscernible] billion Jim outflows $X.X earlier cash XXXX. interest talked of around [indiscernible] billion [ [indiscernible] EBITDA ] in dividend, year-over-year improvement CapEx $X XXXX. in Jeff seems [indiscernible]. Question budget

So there and how we buyback items expect to should here? to this Or think [indiscernible] of you'd cash activity should net need your the from next we Just sort year? about expect you further year, net debt flow does of pacing cash remain flat? next are relatively impact how

Jeffrey Tate

that to the coming is, question. some we're for back from the Short answer focused activities type thanks yes. unique-to-Dow We levers a similar have expect cash of on the on. Mike, proceed would of

could at of [ past those the also to that as activities our that make the that mentioned nonproduct as that judgment us would be opportunities. on looking looking Some on, venture besides working we've at joint give ] some cash our well continuing infrastructure we're producing of in progress some restructuring assets, still Nova and

able XXXX support higher unique cash And plus our levers, of to will be so year, off versus to give for is, expecting rates what us plan conversion be opportunity to Dow cash our XXXX. this those ultimate coming had cash we to uses EBITDA our the whatever similar or with

Operator

from Fischer Goldman [indiscernible] Sachs.

Patrick Fischer

of income. the licensing Just a questions couple around

than So expected after then gave it QX? from you And either just was unexpected came year's or Or is much one, it pulling how you project cycle? was forward the two, next in? bigger that when QX guidance an it

James Fitterling

cracker on St. on by I'd in are small of packages Duffy, turnaround A timing terms it's out. the milestones. as engineering say beat ] moving [ on in delivery just timing those well was -- driven of relatively big chunk P&SP. Throws it's and

we around having activity. remember, hurricane you of the were the time was that off to coming As turnaround all due start we hurricane were --

So not I to make could move deal focus to were with quarter. small while the grand scheme on was into think of we decided quarter first just we relatively it the issues and we hurricane-related it in so But have to trying just things. that

Operator

next from comes from question Your TPF. Matthew Blair

Matthew Blair

quarter. You Devon? And structural? was perhaps market. mentioned to or a a that fourth ] with to temporary U.S. that on hoping wider in are offset seeing the little what think [ could you're would the Dow quarter cracking the we're there this enjoy expand of that bit ethane Do then JV Devon feedstocks the appetite any far And expect an I bit little here you're in expecting so seeing frac spreads you expand is JV? higher you

James Fitterling

questions. to we And was. Good I would similar very the look winter as forward, is summer on the where say strip ethane

at consistently frac Our range $X.XX have on ethane spreads below. in or $X.XX range. to The for $X.XX been probably is quarter the

to see that So I going probably continue. think we're

some Natural positive we've gas this good out. in the took had capability been very obviously the export and production, third quarter hurricanes for has as

competition we're I the going the that see which is see of didn't think see back is we quarter. you're in that, some some come I that gas edges. to for to that capability think third think, export going All why I around in,

cost positions. we still got very very, advantaged think I

the was what then And second?

Unknown Executive

Devon.

James Fitterling

in been to We Yes, On Devon. we've with that partnership very up continue XXXX. Devon. happy and ramp with look, XXXX that in started the back

got wells grow done to exposures. and XXX with this our expected online offset additional them, to we've come us XX to we've continues It help Right now, year. ones

a to we that And cost I Obviously, for we coming forward be to we to very in. continuing with It's we're market both it. offset that is work and net into with worked continue way strong happy deal of our trade a us. looking the It's partnership, the it. think well

Operator

Capital comes question from next Yefremov from Aleksey Your KeyBanc Markets.

Aleksey Yefremov

on product maybe not the to or as here? Jim, year $XXX then to specifically with I segment year [ started strongly quarter. do this into expect And was and surprised us, this next about EBITDA X for ] to year, quite II&I see pretty just you regions in XX continued The soften. million Could EBITDA what reflect give you did well? what perform

James Fitterling

Yes.

in had our America, pressure up opening in had we Glycol-X price Polyols industrial at I positive. North still to the in plants to that supplied obviously, a volumes mentioned and a running we running, on the so lower that So MDI. We and third-party was gas rates. lower had had there, PO outage we which up, process MDI back but

look, out, other as us the produces thing for then And Texas-X was when well. happened propylene Texas-X that

had that to propylene we out, of some Texas-X so had we a go the when that to market so get higher cost. into was And

MDI I think footprint tighten PO a the is correct up onetime, was it which was big that driving will to So itself. decision force Freeport. around in The onetime, to the a polyols, the issue on

forward, as brings more length go we in which much the as PO, have in the balance. don't American North market we So

as America, the So we quarter. drag bigger that and move I slowdown polyurethanes think forward, was in in the North it's

Operator

comes Your Laurence Jefferies. from next from Alexander question

Laurence Alexander

sense the you out? what farther on Dow XXXX bare for disclosed, or covered? the publicly how Just like is mean, you've After even give the unique pipeline phase can a looks to levers, I longer-term cash ones to the that

Jeffrey Tate

this Laurence, is Jeff.

best as to we'll more wouldn't of reviews things I out as through create we we this have go our our to enterprise it. and all definitive across continuously assets approach mean, all those get at mindset of to stage. our and of that Going able annual continue too identify opportunities, we of the our could a XXXX, be value

I more some that are But us are the in around bring term, that $X of But to, more anything near at out commitment that we'll an this you couldn't the I've over specifically will the ones ones maintain earlier annual identified the continue but that well of impact. noted specific XXXX, things question of that to on billion we've that basis. going give again, point, near-term

Operator

next Your from Arun Capital Viswanathan Markets. comes question RBC from

Arun Viswanathan

guess at portfolio to -- been So about European there's ask a of lot reviews, wanted I point. this just assets of especially I

here, potentially any or industry shutdowns those capacity in happen coming if be some as of of 'XX. you analysis through maybe could and wondering look much shutdowns. kind How you've of assuming -- out gone just So the P&SP into [indiscernible] reviews in result

from thoughts there's because we've been side kind well, maybe down. us on the some a PMC And as in just for with a maybe demand you mired but of well demand shoots global coating coming green rates standpoint, while, your as can weakness if give supply on

So do you see any improvement in operating rates as on the PMC side well.

utilization you comments So PMC could get your into on P&SP 'XX? just both look as you maybe and

James Fitterling

in our primarily polyurethanes. Yes. we've mentioned around isn't shutdowns, look But before, is we'll into I Arun, portfolio think, it assets work and that. think again, a driven bring really And locations. smaller low-cost look, at by lot down that our done I as capacity Europe I bring to

that looking our at focus which our a remember for our also really owner P&SP Does there Growth businesses, portfolio? Investor to It's continue allow went we're better to Day, the on for business. is what Solutions you'll business from silicones and Industrial Invest us

Europe, we're In there. have focused market domestic P&SP the we good positions, in and on

announcements industry, X.X my is So I shutdowns million that the top of -- think been to and about this are metric on of Europe. in has There about off competitive. made our tons those focus head, assets doing in continuing the there make coming more already I'm

we'll facing may high-cost that to cases maintenance think in some that or an probably happen. other be asset to work stand-alone continue where you isolated older needs see has life that extension I

challenge. So be that will a

think in most not a decisions in for were in cash Europe. situation losses years P&SP those in number was of those flow cases, of of I there asset taken. that a We're before discussion

sector marketplace. the even slow, in up. pickup will things coatings, see coatings this and of shift year, though expected growing with think had volume growth mostly been the we really our on architectural strategic has was pick I as good what in start think customers, well that we've And coatings I ahead to the housing

growth a lot autonomous vehicles and your traffic year, markets autonomous a devices to that for the communicate markings assist or the are there this development in with them infrastructure-related. to some to today of requiring -- can We lot paint road the to cars. that for road on make of react There's had going on coatings in actually put with future of lane are be vehicles able better type space

both housing of coatings to growth continue is monomers a in market business. we'll doing up think those, I'd will the where little. pickup but Coatings tighten see on need things I say the well. to the be So big is

Operator

concludes back Andrew question-and-answer to Riker now over like to for I'd This hand closing our session. remarks.

Andrew Riker

we and our Thank joining in interest call, you, everyone, your appreciate for Dow.

within Dow's call. on our This again. reference, you hours. a transcript website concludes your For XX copy of be will posted our Thank

Operator

attending today's for call. you Thank

disconnect. day. now may Have You a wonderful

Dow (DOW) 24 Oct 242024 Q3 Earnings call transcript