DOW - Earnings call transcript Q4 2024

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Operator

Greetings, and welcome to the Dow Fourth 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 begin.

Andrew Riker

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

an non-GAAP to comparable website. On on refer that results, year We fourth intentional overview call. A environment and the reconciliation on our associated economic for directly also first quarter. then of will on contained Slide release an the most the out measures our navigate performance, our agenda Jim quarter earnings guidance the downturn today's GAAP operating other and our is macroeconomic of share is is posted will news prolonged and and the measure for the call. will full close will financial X Karen actions details review provide in Dow Jim disclosures Jeff taking update to are and modeling the our segment provide will

Following will your that, we questions. take

turn Now Jim. call the let me to over

James Fitterling

There's Thank our X. Andrew. you, Beginning unpack on a in to lot Slide results this quarter.

from price continued across X% period the volume despite and was which the shareholders fourth year $XX Dow delivered which the all cash spend reflects year-over-year operations dividends industry Returns compared Team growth quarter, in segments. continuing our million flow free and totaled Operating approximately our billion, down macroeconomic $X.X me let flow down Local the $XXX of was quarter, period same were X% quarter with the declines walk CapEx versus flat our pricing and last million, first $XXX was of consecutive In So $XXX in pressure quarter. million. operating in is conditions. Net ago $XX.X year-over-year was year. Cash headlines. of sequentially, through resulting billion fifth across to the million. is total EBITDA the sales weak to

As income adjustment Jeff additional more support numbers our call. Throughout later announced EPS. our the in we to will noncash net details for while impacting growth a in you the also mindset. this quarter, tax of and on a continue best provide had actions saw that quarter, owner optimization global portfolio this maintaining that we

to operating for making Gulf We U.S. it to receive expect of Texas an structurally our at flexible assets, infrastructure minority continue select been businesses. where we global assets weak X announced X of packaging our example, proceeds persistently we the European cash in signed by business, billion select Macquarie the up with stake a up to several unit. laminating of Asset years, we macroeconomic completed past Management the cost demand rates agreement We over for adhesives sale a and review for of to driven strategic polyurethanes $XXX ramp the million, enterprise our For of and business in approximately definitive value glycol Coast sale a cracker for Arkema challenged of has $X which our region primarily highest and conditions. key

economic us navigate million. also until million reduce to our CapEx to additional we second Europe. This idling $XXX in at announced by downturn. focused by our dynamics reinforcing are the billion competitiveness improve. will today, we quarter $XXX this asset costs our ethylene $X as on turnaround actions to the decision Collectively, are We and long-term prolonged a actions continue crackers in postponing targeted our of market starting one maintenance And this in result

strategy Europe, Fort path to stronger, year-over-year both volume in we generate When Saskatchewan, advance Turning delivered market and EBIT evolving a sustainable Dow our than future, we $X in with Awards Alberta. confident company's expected Earlier Place supply to Zero in more our shareholder long-term to sluggish demonstrated through recognized markets we address billion and construction more our cost continued and is World's Workplaces. X externally assets. I in company. Team foster net to Last $X.X mindset excluding as EBITDA sales Great awards ability growth billion the XXXX, innovative and owner our to dynamics long-term proactive by X%, for XX year, complete, remain $XX industry-leading operating investment serve. recovery enhanced and we Dow Innovation uncertainty XX priorities is that including XXXX, the the named higher project In Team began many become approximately our past of demand annually of growth to of to Best to billion in a year, top in to Fortune continued of X. incremental and challenges chain and also returns. merchant certifications. navigated over Slide actions Edison Work profitable sales. best disruptions We XX and response And and near-term XXXX. Dow earned Dow hydrocarbon weather-related and several regions in achieve

Operating over Slide provide it segment operating X. Carter, Now will overview I'm S. pleased our who Karen an Chief to Officer, to of on performance turn Dow's

Karen Carter

pleased innovation markets worked growth. polyethylene me recently leading our Dow, years of largest our an functions, and broad you I advantages. The for including Chief building engine segment, forward businesses Dow's than P&SP, look leadership I'd end commitment I'm within well with owners, of the electronics future. begin, And consumer Officer. Operating to the construction in most has today. progressed is as our our have you, and as the across to profitable a many the be through organization all This it I to deep competitive Jim. range company's my honor you, a operating named to engaging at before Dow's have franchise. and I more global mention given I Thank and company's positions strength appreciation and delivering XX near to to of like join In what

our my reliability to customer business progressing to are strengthen productivity. commercialization innovation results, value priorities the of Dow's further priorities and and our accelerate driving strategic and to As long-term operational deliver COO, committed for I while enhance am pipeline shareholders. engagement, our

both was and pressures driven price Volume specialty higher in except was slowdown the market primarily was let's the competitive of by supply and as demand Latin was America, fourth margins Now and flexible Operating decrease revenue. packaging million, X% industry for Despite reflected quarter. Specialty This a reflected we in polymers a primarily of challenging the In demand. EBIT operating lower polyethylene million nonrecurring other driven price backdrop sales a by decline food local the all & move indices with in decrease and lower for to This hydrocarbon result licensing of $XXX and the typical licensing segment the results. entered a third-party revenue. Segment segment primarily and integrated period. results prices year-over-year Packaging our to $XXX price functional was regions compared Plastics ample segment, by lower throughout seasonal the in sequentially. and a driven ago October quarter year-over-year. This down year

and strong Infrastructure segment, as Intermediates pharma to demand the energy from we stable Industrial demand. well benefited Moving & consumer global as

and seasonal for also improvements typical [indiscernible], coatings agricultural experienced applications saw normal declines. while We seasonal

fixed availability up across & segment, Solutions the the silicones. building business. Local residential And X% quarter up X% the improved $XX X in and segment Operating partly ago driven architectural pressure our while construction increased offset EBIT ago gains both chemicals fourth supply year-over-year. business, Blackhall compared in Those schedule. markets global gains in markets. and primarily unit downstream Solutions price and polyurethanes lower and by Performance by was were Results interest declined to higher at the gains by supply in of We million versus costs. rates end operating rates ramping the increased year as construction weakness driven and X%, achieved and ahead results, for continued high in This improved spending EBIT volume period. the coatings period, we despite were Looking softness was with to volume year Industrial our by year-over-year, volume this Coatings was Materials availability driven up Industrial finish business. Operating as continued strong

macros I'll call over the our turn outlook. the Jeff, Now and to of who provide an overview will

Jeffrey Tate

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

Moving to Slide X.

of In While recent is pressure contrast, signs this actions China pace in declining led rate to global the output global primarily impact end GDP and sectors. continued PMI inflation positive created indicators we levels XXXX, cuts strength as and have continue challenged demand. and at challenges also dynamics is similar key recent interest a expected sectors. stimulus orders is grow manufacturing end to levels spending durable These service-related includes December. Ongoing monitor by new any housing in for to and in affordability to as economy, for with on U.S. market in contractionary more at well X-speed the Europe the and of good in in activity markets. Notably, inflection economic being

watching volatility, we addition, impact are In for geopolitical including any potential tariffs. ongoing from

verticals. rates mortgage globally, manufacturing demand now weak market Europe driving Fed particularly soft. up rates. and to decelerated to sales and demand year-over-year remaining China, constrained demand are U.S. continue throughout to growth higher U.S. sales in month. new export representing respectively. growth, in declining declined by below activity in were domestic resilient driven be highest across discounts is government This year. above in prior residential be affordability construction. were tepid interest home confidence In inflation looking in Now the and U.S. levels back consecutive see Europe May inventories remains China from the issues continues with packaging, level building the remains overall in U.S., mobility, consumer year-over-year America, we China, with and with Infrastructure X-year although X%, In In despite retail the December. lower persistent auto the stimulus X especially furniture our XXth the their in also polyethylene sales since clear demand overall month. Consumer North up China the continues elevated to permits in and In actions, by spending in And December, prices average. for ongoing

the year. registrations saw compared We declined the first the XX% half the car in of EU of second half XXXX in to new also

our X. turning outlook Now on to Slide

snap. to This quarter expect approximately due the million billion, cold due have quarter-over-quarter. down feedstock severe increased is to costs, $X We which to higher largely anticipated earnings first $XXX be

We we expect this to the start margins pressure as quarter.

quarter. [Audio our We expect energy year from to will maintenance be and in feedstock cost activity planned operating increases across but three we maintenance Packaging and planned the in a roughly higher segments, also quarter price perspective to first Specialty the activity have timing Gap] In expect higher full Plastics, outpace

expected are margins integrated global to be result, lower a As sequentially.

as startup weigh is anticipate the our end U.S. soft we lower to mortgage of near-term headwinds our capacity and scheduled from energy and new In West polyurethane the catalyst $XX in Building [indiscernible] addition, we In should we support Cedrik [indiscernible] in costs business activity, at in the construction and Day ethylene Investor the high additional the Materials enable Solutions Performance segment, Coast. planned well sector capacity million the from lower Intermediates primarily we & along the second which Infrastructure our the Industrial one And the maintenance Gulf have beginning China higher anticipate Coatings sales as Coast. This sales of at with Gulf approximately higher in In on growth quarter. in weakness oxide our Texas, asset outlined segment, business. in our planned remained continued maintenance in activities last rates quarter, demand. investments Industrial will markets margins & of and U.S.

in However, the demand $XX provide of first seasonal tailwind we million. to a expect uptick approximately quarter

be Coast our is maintenance In final $XX U.S. monomers yearly approximately a of powerful week, U.S. the winter the Gulf storm. our note, Coast to assets a was sequential Gulf impacted addition, last in million. On headwind a regular at expected by

The industry. not have monitor stemming any meshed our well, or from storm. both guidance unfavorable Our but include to developments well at continue as as across manufacturing sites current further favorable the does impact any we the sites

Now Jim. I'll call over turn the back to

James Fitterling

costs economic Jeff. reinforce is the recovery you, slower-than-expected Slide economic further reduce industry and our in our the cycle. long-term Dow On X, midst actions through is experiencing, to the competitiveness Thank of several that key taking and our prolonged downturn

that and we're margins. First primarily XXXX. labor we on foremost, at actions implement reductions annual billion improving of These aimed be additional on contract our cost actions services. purchased announced taking an today and focused rate targeted $X We third-party basis run by will will

approximately update of our would evaluation this elimination and we of a European Dow provide an announced targeting are off footprint track asset addition, In we to we X,XXX by work that rolls. the mid-XXXX. we're on Last strategic quarter, on kick

complete we million also and We $XXX do preserve macroeconomic $XXX reducing target taking $X.X financial this to our CapEx current demand we're spending strong in-flight higher to to compared of by match previously as projects Lastly, year, our foundation. return recalibrate XXXX billion. conditions, to to million disclosed so growth deployment our the we'll and intend our by actions our

we keep will roughly the levels We a see CapEx these clear markets spending recovery serve. we of across that broad at materialize until portions end

to X. Turning Slide

investor. company by of anticipate U.S. ongoing close This at X and manufacturing of a Infrastructure sites with assets, comprised Dow support equity Dallas reviewing named is of Solutions, month, will Last our We Macquarie wide continue Solutions Management, dedicated Coast. The of operate new We a mid-XXXX. services a Infrastructure within infrastructure the transaction in agreement along in infrastructure-focused Diamond practice formed assets infrastructure support that Diamond management the of range strategy. Dow priorities to team leading has select company sell a portfolio. newly Gulf will our definitive the into global Asset global entered a XX% stake

as partnership standards Importantly, of operations Dow, Dow's option for has minority operational continue growth expected for Asset of cash world-leading and to position in a is existing this positions exercised. The future This Dow financial and to approximately maintain invest control long-term to approximately to well and increase XX% generate opportunities With for equity billion growth billion incremental to Dow Dow. customers. initial within with enhanced Macquarie flexibility which in proceeds upheld. operational new to our operational $X.X as efficiencies partnership, a months the XX, and would as Management's cash will approach conditions Macquarie on balanced leverages if excellence to our and Asset is committed increase ensure particularly X from cash deliver we $X delivering to transaction to safe allocation Management improve. Closing enhanced shareholders, generate closing, are returns the disciplined reliable we environment, to infrastructure priorities. are market a to near-term proceeds stake our navigate Slide as challenging capital and strong and

Our ability success. proactively in position long-term economic manage to extended Dow downturn well will an for

at the dynamics starting in us idling improve. As in This spending one I earlier, levels our mentioned ethylene maintenance market result crackers until last year. in decision of the week, This quarter. will postponed turnaround second in spending planned Europe. reduction asset line will in we prior turnaround with this turnaround keep XXXX

continue supply We profitable demand until will match to with margins improve.

We take cash and actions operational strategic our footprint, costs to and reduce us long-term drive our global near-term our expenditures. reduced XXXX, enhance strategic to while In actions optimize will capital priorities. and and proactive earnings help our to CapEx flow committed cost to continue margins additional spending growth performance, remaining

shareholder on same support our and to our portfolio capital time, foundation, see we continue to quicker dividend. At billion all recovery. With with cash volatility. to in positioned generate the earnings energy drive best mitigate Dow With allocation in electronics. And get In consistent we solid we to long-term projects well as proceeds improved higher on ability underlying to growth continue a focus Q&A. end to representing will for growth and levers margins We're priorities, cycle. turn the flow potential in Dow's that actions agreement record it operating in addition, and including that differentiated demand maintain cyclical unique once our XXXX. is markets to and to will are I'll industry-leading financial delivering return with us ensure started Dow's the further mindset enable of remain cycle completed, to proactive optimistic we and confident of that, and financial will to Management up cash investments, near-term such our value the discipline payback attractive Macquarie across packaging, and to our flexibility transaction Asset our This back signed owner strengthens Andrew track the with our $X financial to deliver

Andrew Riker

Jim. you, Thank

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

Operator

[Operator Instructions]

Unknown Executive

we Washington, the a to brief about to wanted I occurred before question, make D.C. few last Just get near tragic that first comments the incident night.

are We of yesterday plane the ] saddened by passenger crash. news [ evening's

the thoughts been this As are their deepest a crew who members Operator, those this on and centered our have company tragic all do during affected for are event with value incredibly have families we the with hearts people, our first sympathies difficult heavy and time. by question? passengers,

Operator

your first Andrews Vincent of with Morgan Fitterling, Mr. from Yes, line the comes question Stanley.

Vincent Andrews

I X was bridge sort items of ask about you could call, the rate which or we if to operating macro just Jim, last of one improvement. talked revisit in the

maintenance, be third to was Dow The which second the year-over-year planned startup were contribute. going to of And that was projects going of sort delta it's the just neutral sounds now. then like

update at just us could you XXXX point. if you those on where for So see this

James Fitterling

get for the into industry pre-COVID continue operating XX% Sure. would the on in we say I'd not we're be that. board. quarter, some that. but Europe to but And weight an about improvements in lower fourth rate, below big Look, has expansionary levels strong. been company overall Europe than sectors even I on operating a be in the industry rates it relatively other housing-related be polyurethanes, the Americas level on say, yet. rate, to if the continues still across the operating like in operating saw you rate, can

Obviously, that don't part probably it rates chain, have from -- mainly propylene a propylene maintenance drive lot on about better State first and drag won't of big we've kind targeting an So silicones the and quarter obviously, and housing on operating in the flat chain and low silicones. a to we're chain the crackers we you're silicones, but was it people on a Europe, in then defer of China. show to in Terneuzen up Year-over-year, the capacity doing and year-over-year the things. the XXs Tarragona. than adds downstream in stronger percent integration that high ethylene are turnarounds, trimmed X types XXs, be realize of The talking rates decision of automotive between

chain propylene in so ethylene the chain, And to to balance have the addition the of managing well. part of part we as

And allow also this things will region. tighten up save to so It us that a from deferring some the standpoint cost year. will maintenance balance around

So that the we that of net in this be a will and the Dow startup we think are in projects positive have several then year, flight. projects

which on in We the by to are polyethylene, up start have track middle of projects the year.

of Industrial are that for which up. the -- a have in Solutions We to still to then got of our schedule XXXX. couple track projects path project term, end longer And in start X we've Alberta, on is on

Operator

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

Michael Sison

guess, XXXX much like versus going what heard 'XX, we've it's 'XX doesn't macro I demand. be 'XX so to better sorry. seem Unfortunately, mean, I -- overall is than far it

for got higher costs here You've feedstock headwinds some at energy.

You've got some cost savings.

demand do directionally, sort I versus look of if flat? EBITDA that So year?; mean 'XX at you how mean, be I up, unfortunately should similar in is this 'XX. down,

James Fitterling

$X 'XX, of XXXX. versus taking we're big 'XX are On to cost actions the underpin question. EBITDA billion good in improved of obviously, Michael, part a

be I which starting and that of year, growth, up we'll from be up. able be the have point projects sold volume start and will this that all they out to accretive got the we've So mentioned them

of that. growth. have consecutive volume obviously we've a you not tremendous although shown X amount, quarters So on counting We're

you real position our think would So to get is to the I I the strong. demand P&SP the action the chain is say question, cost have about in but the advantage on reason be power have In and continued keep lot the also I'd oxide our we're its taking general, for pricing and to that's of and share, derivatives still going underpin markets in think say low-cost a the in and improvement P&SP, markets. and depend to will ethylene in what ethylene

in You Solutions. strength see Industrial that

you although margins P&SP. integrated see of we that the strength, strength pricing some the fourth You had slipped in in see quarter. that Overall,

So I sign. will think a be to continue positive that

why I things we're the is we want have our things take I of that keeping up. be dividend think take CapEx there. downstream back, very in actions then, we're to position we'll you actions I strong and Europe, to the gloom to continue the coming cash take to Europe is to to to try tighten one of so we that need to but about cash, going And to there be to think we and don't not flow manage doom as a course, up realistic going demand have carefully, better tighten to and in stay announced priorities. saw which #X reductions that

Operator

of from Ahmed the line with Your next Alembic question comes Hassan Global.

Hassan Ahmed

P&SP. obviously, of I'm are the a of a of polyethylene And a gone You're there? [indiscernible] Question U.S. sort gave? variety of guys polyethylene just up what in bit you have have reconcile on in And there. over baking the sort well. guys to that contract-wise. table margin on prices pricing for price guidance of sort you looking as squeeze hikes the And clearly

And in? I a you question. you prices sort What pricing polyethylene X-part in? baking environment are what So ethane baking of guess are

James Fitterling

ask to parts. those X her to welcome to P&SP call and I'll the and for cover Karen [indiscernible] me

Karen Carter

And for thank you the question.

back happened a I perspective. pricing at important quarter go really to fourth think it's look what and from to

really you we to by also quarter, pound. of the market generally down in resets occur time go throughout per but not by October that market prices driven As decline know, continued the prices $X.XX moves, saw that at then year. contract And

the year. But as increase coming we're same we at got low prices. with So you the immediately input time, saw XXXX indicated, we as almost into costs into

have And we for as gas $X.XX indicated, increases seeing and do both in $X.XX table quarter, and natural January on you So February. the $X.XX price in pound fourth ethane costs. the we per are in

unsustainable. But are have going our increases. I on reached really we being costs they outpacing a just Margins to are so those that stand important it rate are firm is are place want price reiterate And at that implemented. that increases the which to price

getting So be to you increases we are in that should going expect through. see price resolute those to

James Fitterling

time and into of thank also I and They move as reality. a to of quarter. Nasal you is Hassan[indiscernible] blast everybody and hits softened It when goes first second typically this Gas was also the the XXX year increases billion little cost of dose cubic $X.XX happened winter production on the that short-term strong. feet We quarter per moves don't in That's advantage, the that. change day in see The would year. rate. Europe. back only [indiscernible] frac any year million is last a I bit good say the ethane spread very of a in Btu. a is slipped propane other half the that thing gets

I start dramatically. a but to come bit, little think back not to it's going

to reason another out fleet cracker it's things in Europe. in the So balance

Operator

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

Jeffrey Zekauskas

adding they for there's you. so I assets no Or polyethylene want add is you XXXX. oversupplied. global Lyondell little is of really that When industry that Do in your and European the between at America. you now pounds the CPChem, make another I assume see net close that X between to same your addition. any in North that's commodity you're Europe, to adding that? And down money, is The billion won't we is that and And that, results Dow plan money. half we assume don't take what look

for comp is event? last So to it lower year. is want flow are the billion flat. the Jeff, EBITDA of was what shares add management a first happened balance going is share how base? many a you Is this cash And Or really And you for than a is, year then be issued couple to onetime to cash are flow? additions the net That that closure? addition? to going question do with to

James Fitterling

take of X for tons Jeff million it's X.X tons convert derivatives, what first we're important part X flow. in Scope and Zero Alberta ethylene remember that. emissions, adding million commissions. is and and to will in On have that come supply/demand, to on and thanks X X the I'll ethylene, think I I'll on then Jeff, cash metric

customers So tons we're X material. emissions [ X.X offtake and ] ethylene forward Scope that moving million for now Zero of for in X positively with negotiations the and

the point capacity and a Europe, tend what's towards today. seeing Europe which but have the across and that Europe high is your positions valid. I in is mix there's in are part a available going it that So would industry, improve. mean We're around do indicate no is than different think of reducing there actions I competitive [indiscernible] cost which there energy aren't been actions costs lot been of any signs. the are good to discussion competitiveness, in

going are I in world So cost And and you're to think have places think some contraction look we the I around see there. up not that to competitive tighten there.

those world. product. Scope Our customers cash the to you brand investments flow? There's first in Zero and that about that that you're in the who Like quartile X Alberta, cracker cost-advantaged want those are talking owners X and cover want regions. we in had in for Jeff, said putting a the emissions. do of nothing anywhere scale

Jeffrey Tate

of the operations, Thanks, Jim. on inventory, $XXX quarter in and purposely do the of did activity, did intentionally that generate turnaround quarter, conversion and is we Jeff, business fourth rate first a we be flow. million approximately areas because especially couple perspective. the build and our a of to in things we of quarter cash did in one of heavy from some here from our In intentionally the was things are XXXX, those as going turnarounds fourth high-growth cash XX% our additional some cash some

of the intentional, the very that that saw. we terms build inventory of Jeff, was in So of some

to only but approach to days ability X look we maintaining X and for to conversion that, our opportunities a moving since maintain continue In another [indiscernible], really addition the that continue be then, get cash get maybe cycle very we strong out disciplined X forward. to that taken to or we've to days in not

Operator

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

David Begleiter

and announced savings presume, or Europe they? the are functions limited, reduced today the somewhat regions X,XXX that those businesses are the permanent and on you being on direct what are cost costs, mainly or Jim, they what are to? attach roles are And I they of temporary?

James Fitterling

David, level. and a to keep on we're them at costs saves, structural trying the down the low get cost

we're a cost the saves, make bit XX% that good done. as XX% about which as pretty our we direct, trying about I'd little It's permanent on third-party So third-party to is say typical. lower saves them is direct we to than cost feel get the percent ability about can. on

rate expect businesses. mid I be next to at and about by say run it's full combination regions rate run year. XX% We and would quarter and a fourth functions a Regions, by

regions we've So a a closures here. improvements announced where that of focus. a not haven't Functions lot is under Europe and is are then economic site seen pressure, focus. Asia productivity And obviously, we

Our review that on European is underway. is updates like charge that, is why is costs We'll midyear, still by relatively site not but with which or this the nice. have closure anything loaded asset

Operator

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

Unknown Analyst

[indiscernible] for Steve.

do price a impact January price earlier, polyethylene can trade because December that you versus on versus items against Just the contract wanted January for help expect full the some unit that to full adjustment you the there of And spoke increases proposed GX be I be go any How or go year nonmarket just based actually bit benefit that the year increases. maintenance back a the that as operating will to little wonder, such back having the year-on-year on publishers. can And for discrete expectations. 'XX for besides are other the a in 'XX? also to there be spend realizations headwind flat will you

James Fitterling

Yes.

talk on at half at take full then let at your a we I'll things which ask first is prices to as a looking Karen shot year. about should full So part. look of year the outlook. take the the that polyethylene we're and the me And question,

Unknown Executive

we the exit to expect first quarter first margins of So I land some quarter of squeezed would quarter quarter be those costs as and the and are be said. off. going as the through to rate come as prices stock peak the higher polyethylene we

looked reductions quarter a be $X.X focused cost $XXX with from quarter today. So the we the we we you something that then if could and on. second about have more you've remain results you ballpark how quarter in growth that we've levers fourth a market of backdrop And billion the outlined performed, line last year's at in of to got that got. then million the

or back rates back So fourth in the ramped the reached market. Texas unit up. rates full got we've our growth full in X We've glycol quarter. up got production It

that, see there. in on in fourth then top on to little results You GDP the of get a the quarter. And that bit of from we're help counting

think I will -- will we improve. things think would see So I we

will on flat. bit in compression Karen, P&SP, about turnarounds, to you -- got a nonmarket talk have expect pricing full in number the and year do we've want first bit to We the you price the side? little the [indiscernible] but a turnaround be quarter in on what addition

Karen Carter

Yes.

rate well. price of are thing, first is margin I in continue the we first bit as in expect feedstock all But December we'll perspective But some a contract the costs key from you what quarter increases. saw is that we also, then outpacing see think as resets. to compression about think really quarter, see a those So moves the little to some nonmarket

so February think occurred and the the have to we about feedstock this over higher of frame, year. way, if are implement the time increases And January price beginning that going costs at but we it right you the

right. are you So

but contract Polymers. see mentioned And headwind going -- that more a other just our also the some continue resets our continue is Functional to Jim have will a more share side, grow We nonmarket again, on volume. we of then few to turnarounds the few but to as that moves, in are on we energy market

Operator

Next Josh with question line comes from UBS. Spector of the

Joshua Spector

into talk wondering around do a tons lot that around from of Canada. you around export and could impact? the to assume I in can was think guess, tariffs, versus I you facilities what markets. U.S. Or mitigation is can what mitigate right, mix risk your do I do the is? specifically mean activities you Canada you this? the if I come clarify how the potential about if first, you that I could that plan And

James Fitterling

for happening day the what's think is We flow a we fentanyl term, a with is clear it's discussion I which administration of Josh. understand industry States. standpoint starting I on both the providing also from see to thing we're but migration And doing with we're engaged Yes. moves mean both U.S. the for little important product in the Canada. to like ways coming the the bit on refinement think We're every into is what pretty around Canada, ourselves more now, getting right and a trade control most Good question, near data situation. and into I over the but with balanced more that United the product relatively finished get ways.

an of And have So the don't we think the there administration's view looks picture create something unintended to it's going like overall don't so to the complex trying that energy global what I that's petrochemicals do just to the complex and hurt economy. consequences.

here. growth to we think a to have continue where create want investment try I situation and they to

Operator

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

Christopher Parkinson

Jim, deeper. to just a dive little wanted

last now. a just were fees there think the country. by EU Intercontinental you're going lot I I last the how the and of time we did Germany, on about over right Europe time some And we going thinking think strategic are assets Netherlands in of

So about like just trying into panning picture and the -- think over how terms larger in they're years? these developments several next to you fit basically the out of the how

James Fitterling

question, a That's Sure. great Chris.

If energy the obviously, competitiveness. EU, you at challenge is #X look the

has Spain from advantage And so relatively a decent an standpoint. energy right now speaking,

We're look decide to a to balances we market is look for Netherlands I'd the I we what we've positions to and got at just look do those idling partners will two ethylene. and the you to to while announced and the to reduce turnaround balances, this ethylene We're just going at When the want that the have So and to seller. net to We pretty there, we short-term merchant has as say that in year that's at we're the at the avoid this a looking have strategic recently we year. there. with you really there. the a competitive drive market a The which good them I how If on assume focus been between think to the generating lot and cost ability don't us of have that and to that is something still do operations power capability, have focused a nuclear [indiscernible] is their combined the get at depend themselves still throughout, energy on Netherlands discussions they Netherlands, on country cost our election is cracker costs review. the with end manage Spain. this the going to our been on of very energy Germany, to help costs. answer situation. do pretty going and European adding propylene that through of February.

shaping and what Russian Germany look be on at change think I a the take when German it's moved up gas to the will that has post-COVID, shifted facilities stopped fast to operating, supply balance LNG import action happened and in on if there was And imports. government. now LNG it's you really

to However, into the are $XX LNG costs import Europe. million $XX Btu

So can look longer to we structurally Germany to in the term, at have what we cost else do get down.

that going it's I do something it to state I to going think think this. don't action is drives happen. make to EU the require

in has pushing states require this back, to going state heft it's think more no discussion Germany. in I that there's and

Operator

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

Frank Mitsch

about your of in Jim, the I on the segment AI quarter. to ask Karen, want new role. first terms Congratulations,

mostly One one-offs, this Industrial would Solutions in You're what about would Construction fantastic business be the you your seeing calling pace et segments. freeze excluding you're from business, cetera. higher headwinds, of for U.S. between thought sequential out of talk the Coast and de-icing and $XXX Gulf million terms energy. Can polyurethanes

give the you going absent here in these those of can in what is us an sit on one-offs, businesses So really as quarter? kind first we

James Fitterling

don't take that? why [ Karen want to ], you

Karen Carter

that Yes. No, question. for thanks

signs take in of chemicals Europe. know, And rate that to despite interest not the recovering So really if business as have first. cuts applications the we're you quarter, the at in and that several construction really look demand interest first I U.S. and we and are I'll sensitive polyurethanes seeing any rates.

talking So affordability, lows, and as but are X%. but you it housing also well. interest whether also rates if there U.S. about bedding And about obviously then furniture applications you're above its think remains at historic the home in

those the to reasons U.S. our strategic saw if in the European at at perspective, XX in fourth also looking quarter announced where [indiscernible] footprint high review of we're the last earnings, we the of slow. from start a our one you We polyurethanes are automotive that about particular. on that really inventories think years And That's

I And does there, so demand DIS say then what if is overall to I would pivot really stable. that remain

The pharma and global shoots green a energy good. some We icing tailwind. you which demand are seasonal really seeing indicated, as is and also demand, is

notable the to persist. unit So then continues in our we around there. the we'll the of see taking increased quarter [indiscernible] that's things down. have We're turnaround cold that one if first weather is and the do But BIS

that So in will result us. itself for

the market on should now a Industrial the muted again, there. side, continued back. see Solutions is turnaround just see to the that's tailwind [indiscernible], would it macros, We continuing I on So being some but overall, say, with fully also the challenging demand. of then But in with polyurethane first ramp market quarter. of side, [indiscernible]

James Fitterling

year towards the a the shape of And you lot middle to we down on automotive. terms year automotive, and production I start the units. pull last saw year the then positive just year, was add, would strong automotive, of automotive in pretty through as in Frank, the the move of being of I inventory of end think, in

happening. and dealer So discounts things

advance saw end China of wanted in the the to moving because ahead get You of they product tariffs. at year

similar -- an similar in happens there but and we sector. with inventories what so this eye could see automotive on automotive year happen demand And know, keep and have where to I the don't strong -- just we again, we something starts to

Operator

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

Patrick Cunningham

Or anticipate further impacting here? others any actions silicones PM&C, And environment, do or worse anticipate lower China you oversupply assets? would into focus more is getting specialties, better capacity XXXX. with the you on the take upstream downstream taking to On issues are pricing on on actions which

James Fitterling

few business comments things in a good, been pace it's Karen, there? I'd has I'd see say want make better downstream Patrick, space. a is they say And better. upstream demand the that good slow. question. the it's but side how of is taking getting about the may and the look what at to you getting do

Karen Carter

Yes.

at I into get we last to we home I electronics, above like are Jim. quite even growth GDP, downstream thanks, significantly. XXXX. mean care. personal quarter, you good in but to we as markets continue grow downstream in for grew and that mean if to we really So And and also occur look expect seeing continues us

we the there. That frame. as situation upstream, And has in China, so segments, on squarely Over in with though, but time, the XXXX see primarily focused we silicones. come you significant overcapacity slowed it continuing do to expect on growth GDP those significantly, downstream higher additions, continuing we pretty market an but XXXX, did time in grow see to staying to balance, in the applications we're than capacity are end indicated, into those

Operator

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

Kevin McCarthy

if was cash and wondering of walk XXXX. your of flow sources I through nonoperating uses Jeff, you'd view in

Specifically, about cash after-tax from deal. your I'm proceeds thinking infrastructure

as announced or I well not strategic review items uses with today care you call new think asset I'm mistaken. to may associated if out? any you have some with that pending in Nova, litigation restructuring other Europe sources of then cash And base the as and your your

James Fitterling

at the a the look of to XXXX, assume $X.X guide billion if course an year. of the would CapEx are flow the XX% expectations of EBITDA the now to cash right over the from I billion. range you perspective couple our here, things take now for year. in an you a consider just on cash for whatever Kevin, approximately provided conversion $X We rate if

there I $X the from that course $X.X of the on $X billion. billion mentioned infrastructure So the a make proceeds midpoint call, from perspective, there, of an year. minimum be an during up to dividend, $X.X the would billion as anywhere to average And we assumption

$XXX is interest million net affiliates. expense approximately Our on guide

that on We say are the the more to we there, and the course have situation throughout progress good year. that make continuing should to about of

are year about think you walk beginning as to takes the Kevin, and say, those primary of the So cash puts end. flow the from through the I would the

Operator

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

Unknown Analyst

high Macquarie? with new How go your does Macquarie was for XX%, item how the is million. that goes And involved XXXX only $XX much to? interest If to JV minority line with EBITDA minority interest

James Fitterling

time. enterprise this our will obviously, on impact one. And noncontrolling the over cash John, see EBITDA part This the will interest as change be once on be more that the I'll but normal is be reporting Jeff. other the There of impact will impact closes. sizable flow no transaction will dividend take results, that statement the is the consolidated because line you

And So closes of that. we'll once more at the transaction impact transaction share have close. be to midyear the again, have guidance and you'll to point. that quantify particular to expect potential able we by the

Operator

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

Unknown Analyst

questions more Two cash on flow.

turnarounds year So when the Jeff, $X.X COGS about first I some meaningfully. think planned But sales capital your you inventory talked earlier half. in about working for billion last pretty building were and down

year? and full cash back that year. that? from then line you one other assets in What's get on of basis the in $X.X negative this a you working So can second that is And some come how flow think a release liabilities last billion does much capital do eventually? year was And

James Fitterling

$XXX in to right regards for full a on [indiscernible] basis. assumption million the what to the we XXXX, a now million would year of use working first in of cash the range around Sure. $XXX make question capital,

had reassessments As million payables that related we liabilities by and we're audit look throughout at about the course year. other that's driven tax the line Right the really some $XXX now, of primarily year-over-year, assets. and of down tax the long-term we

Operator

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

Michael Leithead

dividend, put Dow probably on based of on up earlier your a questions. proud to free just in around maintaining investor of quite focus of generation. and obviously the the some cash. There's been Great. trough your you're cash an the given the comments ongoing And obviously bow is current a taking just cash actions lately industry-leading dividend lot I'll

growth cash Dow cash why even sort balance So believes can of is using organic of you that or maybe sheet just lay further versus, dividend say, level best support of out the maintaining for here investment? priority this

James Fitterling

add ask north I'll wants on if count I'll take our of at owners and he but of shot Jeff XX% a anything, to that dividend.

of the we our see to they dividend is listen important experience what to we shareholders. to And carefully have and a how lot very want so on

a why that's so top priority And us. it's for

Jeffrey Tate

thing don't Jim, about course maturities in is debt that in until have support any a substantive billion, other debt only this the year. would good approximately position add, have The I we due repayments we're to be And XXXX, those $X.X we that the of to able ones XXXX. during

Operator

Your line next the with Yefremov of Capital Alex Markets. question comes KeyBanc from

Aleksey Yefremov

would includes in cost if $X the to Or you your target reduction those European clarify of be middle addition European actions to wanted I be XXXX? discussing actions will billion the the in that billion? $X

James Fitterling

in them have addition. You'll

a addition of the I that we've will just overlap, there what little in things will but some are bit announced. have asset think to probably discussion be

Operator

call concludes remarks. that session the for now for closing Andrew over to I to gentlemen, the Q&A would turn and Ladies Riker today. like

Andrew Riker

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

XX our within a For concludes will your posted copy website transcript reference, of on hours. be our our Dallas This call.

Operator

Ladies and gentlemen, Thank that your for concludes today's meeting. you participation.

disconnect. now You may

Dow (DOW) 30 Jan 252024 Q4 Earnings call transcript