Electronic & Functional Materials Overvie · Leading industry positions with global reach and access to large, attractive end-markets Diverse products and applications with broad

EMEA

23%

Asia Pacific

45% Latin

America

5%

North

America

27%

Electronic & Functional Materials Overview

Advanced technologies that enable

next-generation smart devices for high-

growth, technology-intensive

electronics and display markets

Performance-enhancing solutions that

enable customers to differentiate their

products in pharma, food, water,

energy and personal care markets

Specialty, enabling material solutions

for high-growth markets that demand

speed, agility and customer focus

Value Proposition 2011 Sales by Geography

LTM Sales: $4.4B

LTM Adj. EBITDA1: $1.1B

Sales Growth: 2x GDP

Target EBITDA Margin: ~25%

Normalized Targets

Mobile connectivity and display technology

Energy exploration and production

New classes of drugs to treat diseases

Performance differentiation for personal care products

Healthier foods and improved nutrition

Key Market Drivers Market Environment & Outlook

Mobile communications pulling market into recovery

Consumer demand for vivid, multi-functional touch screens driving growth

Demand for technology that maintains the integrity of oil and gas reservoirs

New ways to turn insoluble active ingredients into effective medicines

Drive to develop healthier options for foods

Differentiated solutions for all skin/hair types

Leadership

EMEA

23%

Asia Pacific

45% Latin

America

5%

North

America

27%

Howard Ungerleider Executive Vice President

1 As reported, excluding unusuals.

77% of Electronic Materials

sales in Asia Pacific

Electronic & Functional Materials: Highlights and Priorities

2012 Key Achievements Strategic Imperatives

Opened Technology Center in Korea serving global display

technologies business and semiconductor-related research

Acquired Lightscape Materials – specialty phosphor technology IP

Launched IKONIC™ polishing pad platform designed to deliver the

highest performance levels for leading-edge CMP applications

Opened new Electronic Materials production facility in China

New microbial solutions for shale gas production

Launched silver-based SILVADUR™ Antimicrobials to keep

garments smelling fresh by controlling odor-causing bacteria

Collaborating with Bend Research to improve drug solubility

Optimized footprint

and global cost-

competitive

manufacturing

position

Strengthen leadership positions in technology-intensive

industries through innovation

Continue upgrading portfolio by prioritizing the best

technologies in the fastest-growing segments

Monetize innovation for weight management; active

ingredient solubilization; mono-dose home care;

sun/skin care; and broad microbial control

Leverage close to customer investments in Asia Pacific

Expand innovations in semiconductor and interconnect

businesses and display technologies

Collaborative,

customer-driven

materials

research

Focus on faster-

growing,

technology-

oriented

applications

Path to Normalized Margin Target

and Higher ROC Innovation

Innovation Operational

Excellence

End Market

Differentiation

®™ Trademark of The Dow Chemical Company ("Dow") or an affiliated company of Dow unless otherwise specifically noted.

VISIONPAD™

Polishing Pad

ACuPLANE™

Slurry

EPIC™

Photoresists

MICROFILL™

Electrolytic Copper

METHOCELTM

Gluten-Free

Solution

EMEA

32%

Asia Pacific

20% Latin

America

7%

North

America

41%

Coatings & Infrastructure Overview

Largest integrated coating materials portfolio for architectural and industrial paint and coatings formulators worldwide

Broadest portfolio of purification and separation technologies for industrial and infrastructure solutions

Leading position in building products and technologies that insulate, protect and enhance the building envelope for maximum energy efficiency and performance

Market-centric organization with strong customer sales and technical support across all geographic areas

LTM Sales: $6.9B


Sales Growth: 1.5x GDP

Target EBITDA Margin: ~20-25%

Normalized Targets

New construction

Remodeling spend

Industrial coatings

Water demand

Energy-efficiency trends


Population growth, urbanization and growing affluence in emerging economies

Continued improvements in North America from market bottom

Non-residential and infrastructure market growth

European markets remain weak

Weakness in polysilicon value chain (Dow Corning)

EMEA

32%

Asia Pacific

20% Latin

America

7%

North

America

41%

Howard Ungerleider Executive Vice President

Value Proposition 2011 Sales by Geography Leadership


Innovate Grow Optimize

Coatings & Infrastructure: Highlights and Priorities


Introduction of breakthrough stain blocking technology for

architectural coatings

Development of next-generation epoxy coatings for pipeline

applications in the oil and gas industry

New low-cost performance monomer capacity in Saudi Arabia

Successful launch of award-winning polymeric fire retardant via

global licensees, making it the industry standard for polystyrene foam

insulation

Introduction of DOW™ FILMTEC™ ECO line of reverse osmosis

elements that filter brackish water with 30% less energy

Surpassed sales targets for newly launched GREAT STUFF™

PESTBLOCK™ Insulating Foam Sealant

Capitalize on global manufacturing capability and

integration to create top-line growth

Accelerate the commercialization of select high-

value innovations – hiding platform, flame-

retardant technology, roof coatings, membranes

and ultra filtration

Improve asset utilization and operational discipline

Leverage regional commercial and technical

resources to support growth in emerging

economies



Expand customer

value with

differentiated

technologies and

innovations

Drive growth by

utilizing

competitive

positions

Optimize portfolio

and envelope

management


STYROFOAMTM Brand

XPS Foam Insulation

DOW™ FILMTEC™

ECO Line

FASTRACKTM

Technology for

Traffic Paint

EMEA

23%

Asia Pacific

12% Latin

America

27%

North

America

38%

Agricultural Sciences Overview

Harnessing innovation and science

to enable farmers to increase yields

Full portfolio of farmer solutions with

both biotech innovations and novel

crop protection products

Driving growth with the launch and

market penetration of differentiated

solutions

Collaboration and licensing

agreements strengthen technology

platform


LTM Sales: $6.2B



Target EBITDA Margin: ~25%

Normalized Targets

Bill Weideman CFO and Executive VP Finance,

Executive Oversight, Dow AgroSciences

Agricultural commodity prices

Net farm income

Global population growth

Increased wealth in developing world – change of diet

Water scarcity and diminishing arable land

Glyphosate-resistant weeds


Strong industry demand from commodity

prices and farmer profitability

High crop commodity prices provide an

incentive to adopt new yield-maximizing

solutions

High planted acreage in Northern and

Southern Hemispheres

Leadership

EMEA

23%

Asia Pacific

12% Latin

America

27%

North

America

38%


Agricultural Sciences: Highlights and Priorities


Achieved 3QYTD sales record for Agricultural Sciences and both

business platforms (+12%)

Launched Refuge Advanced®, POWERCORE™ and Sulfoxaflor2

Enlist™ registration received in Canada for corn and soybeans

Corn hybrids containing SmartStax® Insect Protection outperformed

competitors in the U.S.

Launched strategic relationship with The Royal Barenbrug Group

for the development and commercialization of advanced

germplasm in forage seeds

Received U.S. patent for Enlist™ in soybeans and cotton

Launch of weed

control system

Increased market penetration with SmartStax®, Refuge

Advanced®, POWERCORE™ and healthy oils

Successful launch of Enlist™ Weed Control System as

the solution for hard-to-control and glyphosate-resistant

weeds

Commercialization of R&D pipelines

Strengthen channel access and technology penetration

Accelerate innovation using both organic R&D

investment and third-party collaborations

Achieve $1B corn seed and trait business



Gains in major

geographies for

key crops

Product sales on

track to exceed

target

Enlist Seed

Share

New Crop

Protection


™Enlist, Enlist Duo and Colex-D are trademarks of Dow AgroSciences LLC. Components of the Enlist Weed Control System

have not yet received regulatory approvals; approvals are pending.

®REFUGE ADVANCED and the REFUGE ADVANCED logo are registered trademarks of Dow AgroSciences LLC

SMARTSTAX and POWERCORE multi-event technology developed by Dow AgroSciences LLC and Monsanto.

SMARTSTAX, the SMARTSTAX Logo and POWERCORE are trademarks of Monsanto Technology, LLC

1 subject to regulatory approval, 2 s.18 launch.

EMEA

35%

Asia Pacific

22% Latin

America

12%

North

America

31%

Performance Materials Overview

Leading industry positions with global

reach and access to large, attractive

end-markets

Diverse products and applications

with broad adjacency opportunities

Innovative growth engine for Dow and

our customers

Full-service supplier with global

technical service network close to

customers


LTM Sales: $13.8B


Sales Growth: 1.1-1.3x GDP

Target EBITDA Margin: 15-18%

Normalized Targets

Construction

Transportation

Consumer goods

Energy

Pharmaceuticals

Oil and gas

Consumer durables


At or above GDP growth in construction,

appliances, insulation and furniture

Light vehicle production growth slows from

2012 levels

Increasing demand for food production and

health for surfactants and PEGs

Leadership

EMEA

35%

Asia Pacific

22% Latin

America

12%

North

America

31%

Joe Harlan Executive Vice President


Operational

Excellence

Performance Materials: Highlights and Priorities


New polyurethane systems house opened in Saudi Arabia

New propylene glycol plant in Map Ta Phut, Thailand, on track for

start-up by YE2012

Launched more than 40 products across the portfolio, capitalizing

on high-value industry opportunities

Differentiated and broadened customer base through addition of

100 new customers in the year

Dow and Sadara project progressed via announcement of

marketing and sales agreement

Completion of PDH unit and

Sadara delivers next level of

earnings growth

Maximize benefits of low-cost position and integration to

outperform the market in asset utilization and gain share

Implement selective reformulations and line extensions

to earn a premium for differentiation

Accelerate innovation pipeline commercialization,

concentrating resources on highest near-term returns

Leverage Dow’s leading EO position across portfolio

Improve upon foundation of operational excellence

Grow differentiated downstream franchises



Leverage low- cost technology

position to outperform

market in asset utilization and

growth

Strategic investments in production facilities and R&D to optimize

assets and efficiencies

Integration

Projects

Next-Gen BETAMATE™

Brand Family

NEPTUNE™ Flow

Assurance Insulation

Next-Gen Viscoelastic

Foam Solutions Epoxy PROLOGIC™

HS 8000 Series

PASCAL™ Appliance

Technology UCON™ Oil Soluble

PAG Solutions UCARSOL™ Shale H for

Gas Treating

Concentrated

Solar Power

Portfolio

Optimization


EMEA

31%

Asia Pacific

17% Latin

America

17%

North

America

35%

Performance Plastics Overview

Portfolio geared toward faster-growing,

higher-margin sectors

Global leader in packaging materials

and polyolefin elastomers

Leading global provider to the electrical

and telecommunications industry

Polymer and formulation science

enables market participation growth

from customers that demand

differentiated solutions


LTM Sales: $14.5B




Normalized Targets

Global GDP

Increased non-durable consumer

spending

New automotive builds

Oil-to-gas spread


Leadership

EMEA

31%

Asia Pacific

17% Latin

America

17%

North

America

35%

Jim Fitterling Executive Vice President

Strong global demand for flexible food packaging

Emerging market discretionary spending will

continue to drive growth in disposable packaging

Favorable underground utility trends in power

markets; growth in LTE for telecommunications

Continued preference for soft-touch aesthetics in

household products, toys and consumer durables

Aging populations will grow demand in hygiene

market; new demands for softness


Cycle

Dynamics

Feedstock

Advantage

Performance Plastics: Highlights and Priorities


Market Orientation: Deploy global reach and technology

to meet the needs of specialized end-market applications,

with strong focus on emerging market opportunities

Enhanced Collaboration: Partnerships with converters,

brand owners, designers, value chain influencers,

equipment manufacturers and retailers to drive innovation

Technology Integration: Leverage technology backbone

across vast end-markets; rapidly proliferate proven

technologies across the globe


and Higher ROC

Record YTD sales and EBITDA for Dow Elastomers

Dow Elastomers announces plans for new NORDEL™ production

facility to meet growing customer demand

Electrical & Telecommunications recognized with 2012 North America

Product Line Strategy Award from Frost & Sullivan

Introduced new ENLIGHT™ Polyolefin Back Encapsulant Composite

Films, which enable improved solar cell performance

Launched 42 new products year-to-date, showcasing commitment to

innovation and rapid commercialization of new material solutions

INFUSE™ OBC receives 2012 Innovation Award from ICIS

Innovation

Demand on

pace to outstrip

supply by 2014

Global cost-

competitive

manufacturing

position

Global franchise

focused on faster-

growing, technology-

oriented applications

Market

Access &

Differentiation


EMEA

53%

Asia Pacific

3% Latin

America

4%

North

America

40%

Feedstocks & Energy Overview

Competitive advantage through

feedstock integration and flexibility

enable downstream businesses

Strategic JV partnerships reduce

capital intensity

World’s largest and most experienced

ethylene producer

70% of Dow’s ethylene capacity is

located in cost-advantaged regions

Operational excellence and reliability

to enable cost competitiveness


LTM Sales: $11.0B

LTM Adj. EBITDA1: $700MM

Sales Growth: 1x GDP


Normalized Targets

Jim Fitterling Executive Vice President

Ethylene industry operating rates

Oil-to-gas price ratio

Consumer and institutional

goods (MEG)

Chemicals, alumina and pulp

and paper (caustic soda)


Continued high and volatile oil prices

Natural gas prices to rise modestly from 2012, but

capped by economics of coal substitution

Increasing supply of ethane and propane

feedstocks from U.S. shale gas advantage

Growth in chlorine chain and new capacity could

loosen caustic balances from current levels

PVC chain continues slow and mixed recovery

Leadership

EMEA

53%

Asia Pacific

3% Latin

America

4%

North

America

40%


Envelope

Management

Reduced

Earnings

Volatility

USGC Cycle

Dynamics

Equity-Light

Partnerships


St. Charles, Louisiana, cracker on track to restart by year-end,

contributing $150MM EBITDA in 2013

Continued progress towards start up of Dow-Mitsui

Chlor-Alkali JV

In-licensed UOP technology and Board authorization for new,

world-scale propylene production facility to be constructed in

Freeport, Texas (PDH)

Announced new, world-scale ethylene production plant to be

located at Dow Texas Operations in Freeport

Minimize feedstock cost using scale, infrastructure and

flexibility advantage to crack lowest-cost option

Maintain foundation of operational excellence,

particularly in an environment of rising operating rates

Implement strategic feedstock flexibility and monomer

capacity expansion projects

Strong complement of strategic JV partnerships

Reliable and low-cost supply of chemical building blocks

to downstream derivatives

Effective envelope management and integration

Path to Normalized Margin Target and

Higher ROC (downstream): Hydrocarbons

Replace

purchased

feedstocks with

cost-advantaged

production

Global operating

rates for ethylene

exceed 90% by

2014

Expand capacity

without increasing

exposure to

non-core markets

Feedstocks & Energy: Highlights and Priorities

Effective chlorine

and EO envelope

management and

integration

Maximization

of merchant

market and JV

participation

Reduced exposure

to volatile end-

markets, resulting

from recent right-

sizing actions

Path to Normalized Margin Target and

Higher ROC: Chlor-Alkali & Vinyl and EO/EG

Partnerships

Documents

Electronic & Functional Materials Overvie · Leading industry positions with global reach and access to large, attractive end-markets Diverse products and applications with broad