Dow Inc.
Summary
- Dow Inc. is a global materials science company that provides products and solutions for a variety of industries.
- Dow operates 104 manufacturing sites in 31 countries and employs approximately 37,800 people.
- In 1897, The Dow Chemical Company began as a one-product start-up founded by H.H. Dow.
Dow Inc. (NYSE: DOW) is a global materials science company that provides products and solutions for a variety of industries, including packaging, construction, infrastructure, transportation, electronics, and consumer goods. The company has a diversified portfolio of products, including plastics, performance materials, coatings and silicones, and industrial intermediates. Dow operates manufacturing sites in 31 countries and employs approximately 37,800 people. Dow delivered sales of approximately $57 billion in 2022.
Recent Developments
Dow funds seven new business and sustainability projects to drive social impact.1
November 9, 2023; Dow (NYSE: DOW) announced its 2023 Business Impact Fund selections: seven projects that will help drive social impact and advance sustainability through collaboration. The annual fund brings together NGOs, nonprofit organizations and Dow customers to help solve global issues using Dow technology and employees’ expertise.
Dow Inc. Showcases Strong Lineup of Materials Science Solutions at the 6th CIIE2
November 5, 2023; Dow (NYSE: DOW) is showcasing its rich portfolio of materials science solutions at the 6th China International Import Expo (CIIE). The company is also set to sign multiple strategic industry partnership agreements and support the CIIE’s zero-carbon efforts aimed at driving the circular economy. Dow’s exhibits and programs underscore its commitment to helping China and Chinese customers achieve high-quality, sustainable development.
This is the sixth consecutive year Dow has participated in the CIIE. With a core focus on sustainability, Dow is spotlighting five areas: Circular Economy, New Energy, Consumer Upgrade, Green Buildings and Low Carbon. On display are nearly 50 innovative materials science solutions, with 11 making their debut either globally, in the Asia-Pacific, or specifically in China.
During the CIIE, Dow will enter into 10 Memorandums of Understanding. On the afternoon of November 5, Dow signed a $300 million Memorandum of Understanding with ZKH Group Limited marking “The First Order of The First Day” of the CIIE this year. Dow will provide ZKH Group with silicone products valued at $300 million to sell via its online platform, as well as with product and technical consulting services. The two companies will also partner to tap into burgeoning silicone markets downstream, such as electrification, transportation, packaging and construction. This is the second MoU the two companies have signed at the CIIE since 2019.
Dow Personal Care expands sustainable portfolio with three new product launches at in-cosmetics Asia 20233
October 25, 2023; Dow (NYSE: Dow) will present its latest innovative ingredients at in-cosmetics Asia 2023 in Bangkok, Thailand, from November 7-9 (booth K30). The new product launches, including the debut of the Beauty Rebalanced 2.0 Concepts Collection and Sustainable Hair Care Collection, celebrate one of the largest portfolios in the personal care industry that focuses on sustainable and high-performance solutions.
Additionally, Dow is inviting professionals from beauty OEM, ODM, and Indie Brands to join it at the Inspire Asia Beauty workshop, on November 8, 11:30 a.m. in BITEC 214 meeting room. Dow experts will share industry trends and scientific know-how on driving sustainable beauty through the power of bio-based and biodegradable ingredients and 13 brand new formulations from Dow's Beauty Rebalanced 2.0 and Sustainable Hair Care Collection, exploring waterless beauty, high natural origin formulations and minimalist beauty.
Financial Highlights
Third Quarter 2023 Results4
GAAP earnings per share was $0.42; operating earnings per share (EPS) was $0.48, compared to $1.11 in the year-ago period and $0.75 in the prior quarter. Operating EPS excludes significant items in the quarter, totaling $0.06 per share, primarily related to costs associated with the Company’s 2023 Restructuring Program.
Net sales were $10.7 billion, down 24% versus the year-ago period, reflecting declines in all operating segments due to slower global macroeconomic activity. Sales were down 6% sequentially, as volume gains were more than offset by lower local prices.
Volume decreased 6% versus the year-ago period, mainly due to declines in the merchant Hydrocarbons & Energy sales. Sequentially, volume increased by 1%, and was up 3% excluding merchant Hydrocarbons & Energy sales, with gains across all operating segments.
Local price decreased 18% year-over-year, with declines in all operating segments and regions, primarily due to lower feedstock and energy costs. Sequentially, local price was down 7%, primarily reflecting lower prices in Europe, the Middle East, Africa, and India (EMEAI).
The currency was flat year-over-year and sequentially.
Equity losses were $7 million, compared to equity losses of $58 million in the year-ago period and $57 million in the prior quarter, with improved results at all of the Company’s principal joint ventures, primarily Sadara.
GAAP net income was $327 million. Operating EBIT was $626 million, down from $1.2 billion in the year-ago period, primarily driven by lower local prices. Sequentially, Op. EBIT was down $259 million, driven by declines in Packaging & Specialty Plastics and partially offset by Industrial Intermediates & Infrastructure and Performance Materials & Coatings.
Cash provided by operating activities – continuing operations was $1.7 billion, down $282 million year-over-year and up $311 million compared to the prior quarter. The Company delivered cash flow conversion of 103% on a trailing 12-month basis.
Returns to shareholders totaled $617 million in the quarter, including $492 million in dividends and $125 million in share repurchases.
Packaging & Specialty Plastics
Packaging & Specialty Plastics segment net sales in the quarter were $5.5 billion, down 26% versus the year-ago period. Local price decreased 20% year-over-year, driven by lower polyethylene and olefin prices in all regions, primarily due to lower global energy costs. Currency increased net sales by 1%. Volume declined 7% year-over-year, as polyethylene demand across all regions was more than offset by lower merchant volume in the Hydrocarbons & Energy business. On a sequential basis, net sales decreased by 8%. This was due to declines in olefin and aromatic merchant sales and lower polyethylene prices primarily in EMEAI, which were partly offset by higher packaging demand in Asia Pacific, Latin America and EMEAI.
Equity earnings were $50 million, down $5 million compared to the year-ago period. Equity earnings were up $31 million on a sequential basis, primarily due to the completion of planned maintenance turnaround activity at Sadara in the second quarter.
Operating EBIT was $476 million, compared to $785 million in the year-ago period due to lower integrated polyethylene margins. Sequentially, Op. EBIT decreased by $442 million, driven by lower integrated polyethylene margins, increased planned maintenance turnaround activity, and lower licensing revenue.
Industrial Intermediates & Infrastructure
Industrial Intermediates & Infrastructure segment net sales were $3 billion, down 25% versus the year-ago period. Local price declined 17% year-over-year and currency decreased net sales by 1%. Volume was down 7% yearover-year with declines in both businesses, driven by slower global demand. On a sequential basis, net sales declined 4% as volume gains in EMEAI and Asia Pacific were more than offset by local price declines in all regions.
Equity losses for the segment were $63 million, compared to equity losses of $114 million in the year-ago period, reflecting higher margins at Sadara. Sequentially, equity losses improved by $20 million primarily driven by increased volumes at Sadara for propylene oxide derivatives and isocyanates upon the completion of planned maintenance activity in the second quarter.
Operating EBIT was $21 million, compared to $167 million in the year-ago period, driven by lower prices and demand in both businesses. On a sequential basis, operating EBIT was up $56 million driven by volume gains and lower costs, which were partly offset by an unplanned event in Industrial Solutions at Louisiana Operations.
Performance Materials & Coatings
Performance Materials & Coatings segment net sales in the quarter were $2.1 billion, down 20% versus the year-ago period. Local price decreased 17% year-over-year with declines in both businesses. Volume was down 3% year-over-year, as volume gains in commercial building & construction end-markets were more than offset by lower demand for personal care and coatings applications in residential construction. On a sequential basis, net sales were down 3% as volume gains in both businesses and all regions were more than offset by lower local prices.
Operating EBIT was $179 million, compared to $302 million in the year-ago period, driven by local price declines in both businesses. Sequentially, Op. EBIT increased $113 million, driven by higher operating rates and cost savings.
Full Year 2022 Results
The Company reported net sales in 2022 of $57 billion, up 4 percent from $55 billion in 2021, with increases across all geographic regions, except EMEAI, and operating segments, except Industrial Intermediates & Infrastructure, driven by an increase in local price of 11 percent, which was partially offset by a volume decrease of 3 percent and an unfavorable currency impact of 4 percent.
In 2022, the Company had annual sales of $57 billion, of which 37 percent of the Company’s sales were to customers in the U.S. & Canada; 35 percent were in Europe, Middle East, Africa and India ("EMEAI"); while the remaining 28 percent were to customers in Asia Pacific and Latin America.
Net income available for Dow Inc. and TDCC common stockholder(s) was $4,582 million and $4,583 million, respectively, in 2022, compared with $6,311 million and $6,274 million, respectively, in 2021. Earnings per share for Dow Inc. was $6.28 per share in 2022, compared with $8.38 per share in 2021.
Company Overview
Dow Inc. was incorporated on August 30, 2018, under Delaware law, to serve as a holding company for The Dow Chemical Company and its consolidated subsidiaries. Dow Inc. (NYSE: DOW) is a global materials science company that provides products and solutions for a variety of industries, including packaging, construction, infrastructure, transportation, electronics, and consumer goods. Dow operates 104 manufacturing sites in 31 countries and employs approximately 37,800 people.5
Business Segments
The Company conducts its worldwide operations through six global businesses which are Packaging & Specialty Plastics, Industrial Intermediates & Infrastructure and Performance Materials & Coatings.
Packaging & Specialty Plastics
The Packaging & Specialty Plastics operating segment consists of two highly integrated global businesses: Hydrocarbons & Energy and Packaging and Specialty Plastics. The segment employs the industry’s broadest polyolefin product portfolio, supported by the Company’s proprietary catalyst and manufacturing process technologies. The segment serves customers, brand owners and ultimately consumers in key markets including food and specialty packaging; industrial and consumer packaging; health and hygiene; caps, closures and pipe applications; consumer durables; mobility and transportation; and infrastructure.
Joint Ventures
- EQUATE Petrochemical Company K.S.C.C. - a Kuwait-based company that manufactures ethylene, polyethylene and ethylene glycol, and manufactures and markets monoethylene glycol, diethylene glycol and polyethylene terephthalate resins; owned 42.5 percent by the Company.
- The Kuwait Olefins Company K.S.C.C. - a Kuwait-based company that manufactures ethylene and ethylene glycol; owned 42.5 percent by the Company.
- Map Ta Phut Olefins Company Limited (“Map Ta Phut”) - a Thailand-based company that manufactures propylene and ethylene; the Company has an effective ownership of 32.77 percent.
- Sadara Chemical Company - a Saudi Arabian company that manufactures chlorine, ethylene, propylene and aromatics for internal consumption and manufactures and sells polyethylene, ethylene oxide and propylene oxide derivative products, and isocyanates; owned 35 percent by the Company.
- The Kuwait Styrene Company K.S.C.C. - a Kuwait-based company that manufactures styrene monomer; owned 42.5 percent by the Company.
- The SCG-Dow Group - a group of Thailand-based companies (consisting of Siam Polyethylene Company Limited; Siam Polystyrene Company Limited; Siam Styrene Monomer Company Limited; and Siam Synthetic Latex Company Limited) that manufactures polyethylene, polystyrene, styrene, latex and specialty elastomers; owned 50 percent by the Company.
Industrial Intermediates & Infrastructure
The Industrial Intermediates & Infrastructure operating segment consists of two customer-centric global businesses - Industrial Solutions and Polyurethanes & Construction Chemicals - that develop important intermediate chemicals that are essential to manufacturing processes, as well as downstream, customized materials and formulations that use advanced development technologies. These businesses primarily produce and market ethylene oxide and propylene oxide derivatives that are aligned to market segments as diverse as appliances, coatings, furniture and bedding, construction, mobility and automotive, electronics, surfactants for cleaning and sanitization, infrastructure and oil and gas.
Performance Materials & Coatings
The Performance Materials & Coatings operating segment includes industry-leading franchises that deliver a wide array of solutions into consumer, infrastructure and mobility end-markets. The segment consists of two global businesses: Coatings & Performance Monomers and Consumer Solutions. The segment consists of two global businesses: Coatings & Performance Monomers and Consumer Solutions. These businesses primarily utilize the Company's acrylics-, cellulosics- and silicone-based technology platforms to serve the needs of the architectural and industrial coatings; home care and personal care; consumer and electronics; mobility and transportation; industrial and chemical processing; and building and infrastructure end-markets.
Facilities
The Company's corporate headquarters are located in Midland, Michigan. The Company operates 104 manufacturing sites in 31 countries.
| Manufacturing Sites by Region | |
| Asia Pacific | 18 manufacturing sites in 10 countries |
| EMEAI | 37 manufacturing sites in 15 countries |
| Latin America | 15 manufacturing sites in 4 countries |
| U.S. & Canada | 34 manufacturing sites in 2 countries |
Company History
In 1897, The Dow Chemical Company began as a one-product start-up founded by H.H. Dow.6
| Year | Milestone |
| 1897 | The Dow Chemical Company is founded. |
| 1898 | Dow’s first commercial-scale production of bleach begins. |
| 1900 | Midland Chemical Company merges into Dow. |
| 1906 | Dow produces its first agricultural product. |
| 1934 | The Ethyl-Dow plant begins the first commercial extraction of bromine from seawater. |
| 1937 | Dow stock is listed for the first time on the New York Stock Exchange. STYRON™ polystyrene resin is introduced. |
| 1940 | Dow purchases land near Freeport, Texas, and begins to construct a plant. Today the Freeport site is the largest integrated chemical manufacturing complex in the Western Hemisphere. |
| 1942 | Dow’s first international expansion begins with Dow Chemical Canada, Ltd. |
| 1942 | Dow and Corning Glass form Dow Corning, a joint venture to create silicone products. |
| 1961 | Dow purchases a manufacturing site in Terneuzen, The Netherlands. |
| 1989 | Dow acquires pharmaceutical maker Marion Laboratories and creates a new publicly traded company, Marion Merrell Dow Inc. |
| 1996 | Dow acquires 100 percent ownership of DowElanco and renames it Dow AgroSciences. |
| 1997 | Dow agrees to sell its Dow Brand unit to S.C. Johnson & Son. |
| 1999 | Dow announces plans to acquire Union Carbide. |
| 2009 | Dow acquires Rohm and Haas, a key element in Dow’s new Advanced Materials division. |
| 2011 | Dow and Saudi Aramco announce a joint venture to create Sadara Chemical Co. |
| 2017 | DowDuPont merger successfully completed. Company moves forward toward intended separation into industry-leading, publicly traded companies in Agriculture, Materials Science and Specialty Products; separations expected to occur within 18 months. |
| 2019 | Dow completes separation from DowDuPont. |
References
- ^ https://corporate.dow.com/en-us/news/press-releases/2023-dow-business-impact-fund-seven-new-projects
- ^ https://corporate.dow.com/en-us/news/press-releases/dow-materials-technology-6th-china-international-import-expo-20231105
- ^ https://corporate.dow.com/en-us/news/press-releases/new-product-launches-at-in-cosmetics-asia-2023
- ^ https://s23.q4cdn.com/981382065/files/doc_financials/2023/q3/Dow_3Q23_Earnings_News_Release.pdf
- ^ https://fintel.io/doc/sec-dow-inc-1751788-10k-2023-february-01-19389-4964
- ^ https://corporate.dow.com/en-us/about/company/history/timeline/golden-age-of-inorganics.html
