Dow Lays Out Operating and Financial Priorities, Near-Term Growth Opportunities and Shareholder Return Targets at Investor Day

 Dow, the world’s leading materials science company, will lay out its operating and financial priorities, as well as the key pillars of its near-term growth and shareholder return targets upon separation from DowDuPont, at its investor day event at 1 p.m. Eastern today in New York City.

Creating the New Dow

“Since closing our merger with DuPont, Dow has worked quickly and methodically to focus our business portfolio, streamline our cost structure, and refine our approach to capital and resource allocation,” said Jim Fitterling, chief executive officer of Dow. “These and other step-changes in our operating and financial priorities and management mindset well position the new Dow to deliver more differentiated products and solutions for our customers and higher returns and lower-risk growth for our shareholders.”

During the event, Fitterling will provide details on Dow’s path to higher return on invested capital, greater cash flow and increased shareholder returns. Key pillars of Dow’s approach include:

• A more focused business portfolio, targeting core markets of packaging, infrastructure and consumer care – each where Dow holds leadership positions today;
• Right-sized cost structure and corporate center;
• Higher-return, faster-payback growth investments with lower capital intensity;
• Rigorous benchmarking to drive best-in-class performance relative to peers; and
• Returns-focused metrics, coupled with greater granularity for investors.

New Financial Principles & Near-Term Targets

Additionally, management will discuss Dow’s financial priorities and metrics, including how the company intends to drive bottom-line growth faster than the top-line; achieve better earnings-to-cash flow conversion; and maintain a strong investment-grade rating across the cycle.

“We have established a capital structure and balance sheet for the new Dow that will serve as a strong foundation to continue our profitable growth and increase shareholder returns,” said Howard Ungerleider, president and chief financial officer of Dow. “We have the strategy, portfolio, management team and mindset in place to capitalize on the significant earnings and cash flow upside opportunities in front us.”

Ungerleider will outline how the company will deliver against the following near-term financial targets:

• A return on invested capital that exceeds Dow’s target of 3 percent above the weighted average cost of capital;
• Achieve and maintain a strong BBB or higher credit rating;
• Increase EBITDA to cash flow from operations conversion toward best-in-class levels;
• Share repurchases of at least 20 percent of net income; and
• A dividend payout ratio of approximately 45 percent of net income across the economic cycle.

Investors will also hear from the presidents of each of Dow’s global business units, who will provide details about their respective portfolios, how they compete and win in their targeted end-markets and their near-term growth roadmaps.

Path to Separation from DowDuPont

In September, Dow filed its initial Form 10 registration statement with the U.S. Securities and Exchange Commission, marking a significant step towards the separation of the new Dow. The Form 10 process is iterative, and in October, the Company filed the first amendment to the document. Dow remains on track for its intended separation from DowDuPont on April 1, 2019.

Event Webcast

A live audio webcast and presentations of today’s event will be available in the investors section of the company’s website or via direct play link. An archived replay will be available on the website following the webcast.

About Dow

Dow combines science and technology knowledge to develop premier materials science solutions that are essential to human progress. Dow has one of the strongest and broadest toolkits in the industry, with robust technology, asset integration, scale and competitive capabilities that enable it to address complex global issues. Dow’s market-driven, industry-leading portfolio of advanced materials, industrial intermediates, and plastics businesses deliver a broad range of differentiated technology-based products and solutions for customers in high-growth markets such as packaging, infrastructure, and consumer care. Dow is a subsidiary of DowDuPont (NYSE: DWDP), a holding company comprised of Dow and DuPont with the intent to form three strong, independent, publicly traded companies in agriculture, materials science and specialty sectors. More information can be found at www.dow.com.

Cautionary Statement About Forward-Looking Statements

This communication contains “forward-looking statements” within the meaning of the federal securities laws, including Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. In this context, forward-looking statements often address expected future business and financial performance and financial condition, and often contain words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “see,” “will,” “would,” “target,” and similar expressions and variations or negatives of these words.

On December 11, 2015, The Dow Chemical Company (“Dow”) and E. I. du Pont de Nemours and Company (“DuPont”) entered into an Agreement and Plan of Merger, as amended on March 31, 2017, (the “Merger Agreement”) under which the companies would combine in an all-stock merger of equals transaction (the “Merger”). Effective August 31, 2017, the Merger was completed and each of Dow and DuPont became subsidiaries of DowDuPont.

Forward-looking statements by their nature address matters that are, to varying degrees, uncertain, including the intended separation, subject to approval of the DowDuPont’s Board of Directors and customary closing conditions, of DowDuPont’s agriculture, materials science and specialty products businesses in one or more tax-efficient transactions on anticipated terms (the “Intended Business Separations”). Forward-looking statements are not guarantees of future performance and are based on certain assumptions and expectations of future events which may not be realized. Forward-looking statements also involve risks and uncertainties, many of which are beyond the DowDuPont’s control. Some of the important factors that could cause DowDuPont’s, Dow’s or DuPont’s actual results (including DowDuPont’s agriculture business, materials science business or specialty products business as conducted by and through Dow and DuPont) to differ materially from those projected in any such forward-looking statements include, but are not limited to: (i) costs to achieve and achieving the successful integration of the respective agriculture, materials science and specialty products businesses of DowDuPont (either directly or as conducted through Dow and DuPont, anticipated tax treatment, unforeseen liabilities, future capital expenditures, revenues, expenses, earnings, productivity actions, economic performance, indebtedness, financial condition, losses, future prospects, business and management strategies for the management, expansion and growth of the combined operations; (ii) costs to achieve and achievement of the anticipated synergies by the combined agriculture, materials science and specialty products businesses; (iii) risks associated with the Intended Business Separations, associated costs, disruptions in the financial markets or other potential barriers; (iv) disruptions or business uncertainty, including from the Intended Business Separations, could adversely impact DowDuPont’s business (either directly or as conducted by and through Dow or DuPont), or financial performance and its ability to retain and hire key personnel; (v) uncertainty as to the long-term value of DowDuPont common stock; and (vi) risks to DowDuPont’s, Dow’s and DuPont’s business, operations and results of operations from: the availability of and fluctuations in the cost of feedstocks and energy; balance of supply and demand and the impact of balance on prices; failure to develop and market new products and optimally manage product life cycles; ability, cost and impact on business operations, including the supply chain, of responding to changes in market acceptance, rules, regulations and policies and failure to respond to such changes; outcome of significant litigation, environmental matters and other commitments and contingencies; failure to appropriately manage process safety and product stewardship issues; global economic and capital market conditions, including the continued availability of capital and financing, as well as inflation, interest and currency exchange rates; changes in political conditions, including trade disputes and retaliatory actions; business or supply disruptions; security threats, such as acts of sabotage, terrorism or war, natural disasters and weather events and patterns which could result in a significant operational event for the DowDuPont, adversely impact demand or production; ability to discover, develop and protect new technologies and to protect and enforce the DowDuPont’s intellectual property rights; failure to effectively manage acquisitions, divestitures, alliances, joint ventures and other portfolio changes; unpredictability and severity of catastrophic events, including, but not limited to, acts of terrorism or outbreak of war or hostilities, as well as management’s response to any of the aforementioned factors. These risks are and will be more fully discussed in the current, quarterly and annual reports filed with the U. S. Securities and Exchange Commission by DowDuPont as well as the preliminary registration statements on Form 10, in each case as amended from time to time, of each of Dow Holding Inc. and Corteva, Inc., While the list of factors presented here is, considered representative, no such list should be considered to be a complete statement of all potential risks and uncertainties. Unlisted factors may present significant additional obstacles to the realization of forward-looking statements. Consequences of material differences in results as compared with those anticipated in the forward-looking statements could include, among other things, business disruption, operational problems, financial loss, legal liability to third parties and similar risks, any of which could have a material adverse effect on DowDuPont’s, Dow’s, DuPont’s, Dow Holding Inc.’s or Corteva Inc.’s consolidated financial condition, results of operations, credit rating or liquidity. None of DowDuPont, Dow, DuPont Dow Holding Inc. or Corteva, Inc. assumes any obligation to publicly provide revisions or updates to any forward-looking statements whether as a result of new information, future developments or otherwise, should circumstances change, except as otherwise required by securities and other applicable laws. A detailed discussion of some of the significant risks and uncertainties which may cause results and events to differ materially from such forward-looking statements is included in the section titled “Risk Factors” (Part I, Item 1A) of the 2017 annual reports on Form 10-K of each of DowDuPont, Dow and DuPont and as set forth in the preliminary registration statements on Form 10, in each case as amended from time to time, of each of Dow Holdings Inc. and Corteva, Inc.

Discussion of segment revenue, operating EBITDA and price/volume metrics on a divisional basis for Agriculture is based on the results of the Agriculture segment; for Materials Science is based on the combined results of the Performance Materials & Coatings, Industrial & Infrastructure, and Packaging & Specialty Plastics segments; and for Specialty Products is based on the combined results of the Electronics & Imaging, Nutrition & Biosciences, Transportation & Advanced Polymers, and Safety & Construction segments. The segment disclosures have been presented in this manner for informational purposes only and should not be viewed as an indication of each division’s current or future operating results on a standalone basis assuming completion of the Intended Business Separations.

The Dow Diamond, DuPont Oval logo, DuPont™, the DowDuPont logo and all products, unless otherwise noted, denoted with ™, ℠ or ® are trademarks, service marks or registered trademarks of The Dow Chemical Company, E. I. du Pont de Nemours and Company, DowDuPont Inc. or their affiliates.