Dow Outlines Investment Thesis and Capital Allocation Priorities During Meeting With Sell-Side Analysts

Originally Published by Dow.

  • Intends to issue annual dividend payout of $2.1B and launch $3B open share repurchase program after separation – targeting shareholder remuneration of approximately 65% of operating net income across the cycle
  • Reiterates commitment to deliver cost synergy savings and stranded cost removal – approximately $800 million remaining to deliver, of which 75% of those savings will be additive in 2019 versus 2018
  • Confirms near-term CapEx expenditures at or below depreciation and amortization – in the range of $2.5 billion – $2.8 billion – for at least the next three years; focused on incremental, high ROIC growth investments

Dow, the world’s leading materials science company, will meet with sell-side analysts in New York City. During the meeting, Dow will discuss its: operational and financial targets, portfolio differentiation relative to peers, near-term earnings growth opportunities, and intended capital allocation priorities upon separation from DowDuPont. The new Dow is expected to separate from DowDuPont as an independent, publicly traded company on April 1, 2019.

“New Dow will be well positioned to drive best-in-class financial performance and shareholder returns,” said Jim Fitterling, chief executive officer of Dow. “We have a focused playbook of cost and growth drivers, clear and disciplined capital allocation priorities and a strong balance sheet. Our path to shareholder value creation is straightforward and in our control.”

During the event, Fitterling and Howard Ungerleider, president and chief financial officer of Dow, will articulate the investment thesis and financial goals of the new Dow, including:

  • How Dow’s streamlined portfolio and industry-leading positions will unlock earnings and cash flow upside, and position the company for reduced earnings volatility relative to peers;
  • The intent to issue an industry-leading dividend payout of $2.1 billion and launch a $3 billion open market share repurchase program after separation, with a shareholder remuneration target of approximately 65 percent of operating net income across the cycle;
  • Capital expenditures at or below depreciation and amortization, comprised of incremental, high return on invested capital growth investments, with a near-term spending range of $2.5 billion – $2.8 billion for at least the next three years;
  • A total of approximately $800 million of cost synergy and stranded cost savings yet to be delivered, of which 75% will be additive in 2019 versus 2018;
  • Progress the company is making toward its targeted capital structure, with a target adjusted gross debt to EBITDA ratio of 2.5x – 3.0x;
  • Modeling considerations for the new Dow and each of its operating segments, and additional details on upcoming incremental, high return on invested capital growth investments.

The presentation slide deck for the event can be found on


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