- Proactive actions will optimize Dow's cost structure in
response to near-term macroeconomic uncertainty, while maintaining
long-term value creation focus
- Company continues its Decarbonize and Grow strategy as well
as its disciplined and balanced approach to capital
allocation
MIDLAND,
Mich., Jan. 26, 2023 /PRNewswire/ -- Dow Inc.
(NYSE: DOW) today outlined a series of targeted actions aligned to
its previously stated plan to achieve $1
billion in cost savings in 2023. The proactive actions will
further optimize the Company's cost structure in response to
near-term macroeconomic uncertainty, while maintaining its
long-term competitiveness across the economic cycle.
Specifically, Dow expects to realize $1
billion in cost savings in 2023 through:
- Structural improvements of $500
million, maintaining a low cost-to-serve operating
model:
-
- Optimizing labor and services costs, including a global
workforce reduction of approximately 2,000 roles;
- Shutting down select assets, while further evaluating Dow's
global asset base, particularly in Europe, to ensure long-term competitiveness
and enhance cost efficiency; and
- Increasing productivity via end-to-end process
improvements.
- Operating expense reductions of $500
million, focused on near-term cash flow:
-
- Decreasing turnaround spending, with a continued focus on
maintaining safety and reliability;
- Reducing purchased raw materials, logistics and utilities
costs; and
- Aligning spending levels to the macroeconomic environment.
"We are taking these actions to further optimize our cost
structure and prioritize business operations toward our most
competitive, cost-advantaged and growth-oriented markets, while
also navigating macro uncertainties and challenging energy markets,
particularly in Europe," said
Jim Fitterling, Dow chairman and
CEO. "We remain committed to capitalizing on our long-term growth
opportunities in a disciplined and balanced manner, and these
actions further position us to advance our Decarbonize and Grow
strategy and strengthen our competitive position."
The Company will record a charge of $550
million to $725 million in the
first quarter of 2023 for costs associated with these activities,
which primarily include severance and related benefit costs; costs
associated with exit and disposal activities; and asset write-downs
and write-offs.
Longer-term, Dow remains on track to grow its underlying EBITDA
by greater than $3 billion by
2030 while reducing its carbon emissions by 30 percent versus its
2005 baseline as it progresses on its path to carbon neutrality by
2050.
As Dow implements the actions announced today, the Company will
engage local stakeholders in each region and in compliance with
local regulations and consultation processes.
About Dow
Dow (NYSE: DOW) combines global breadth;
asset integration and scale; focused innovation and materials
science expertise; leading business positions; and environmental,
social and governance leadership to achieve profitable growth and
help deliver a sustainable future. The Company's ambition is to
become the most innovative, customer centric, inclusive and
sustainable materials science company in the world. Dow's portfolio
of plastics, industrial intermediates, coatings and silicones
businesses delivers a broad range of differentiated, science-based
products and solutions for its customers in high-growth market
segments, such as packaging, infrastructure, mobility and consumer
applications. Dow operates manufacturing sites in 31 countries and
employs approximately 37,800 people. Dow delivered sales of
approximately $57 billion in 2022. References to Dow or the
Company mean Dow Inc. and its subsidiaries. For more information,
please visit www.dow.com or follow @DowNewsroom on Twitter.
For further
information, please contact:
|
|
|
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INVESTORS:
|
MEDIA:
|
Pankaj Gupta
|
Kyle Bandlow
|
+1
989-638-5265
|
+1
989-638-2417
|
pgupta@dow.com
|
kbandlow@dow.com
|
Twitter: https://twitter.com/DowNewsroom
Facebook: https://www.facebook.com/dow/
LinkedIn: http://www.linkedin.com/company/dow-chemical
Instagram: http://instagram.com/dow_official
Cautionary Statement about Forward-Looking Statements
Certain statements in this press release are "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.
Such statements often address expected future business and
financial performance, financial condition, and other matters, and
often contain words or phrases such as "anticipate," "believe,"
"estimate," "expect," "intend," "may," "opportunity," "outlook,"
"plan," "project," "seek," "should," "strategy," "target," "will,"
"will be," "will continue," "will likely result," "would" and
similar expressions, and variations or negatives of these words or
phrases.
Forward-looking statements are based on current assumptions and
expectations of future events that are subject to risks,
uncertainties and other factors that are beyond Dow's control,
which may cause actual results to differ materially from those
projected, anticipated or implied in the forward-looking statements
and speak only as of the date the statements were made. These
factors include, but are not limited to: sales of Dow's products;
Dow's expenses, future revenues and profitability; the continuing
global and regional economic impacts of the coronavirus disease
2019 ("COVID-19") pandemic and other public health-related risks
and events on Dow's business; any sanction, export restrictions,
supply chain disruptions or increased economic uncertainty related
to the ongoing conflict between Russia and Ukraine; capital requirements and need for and
availability of financing; unexpected barriers in the development
of technology, including with respect to Dow's contemplated capital
and operating projects; Dow's ability to realize its commitment to
carbon neutrality on the contemplated timeframe; size of the
markets for Dow's products and services and ability to compete in
such markets; failure to develop and market new products and
optimally manage product life cycles; the rate and degree of market
acceptance of Dow's products; significant litigation and
environmental matters and related contingencies and unexpected
expenses; the success of competing technologies that are or may
become available; the ability to protect Dow's intellectual
property in the United States and
abroad; developments related to contemplated restructuring
activities and proposed divestitures or acquisitions such as
workforce reduction, manufacturing facility and/or asset closure
and related exit and disposal activities, and the benefits and
costs associated with each of the foregoing; fluctuations in energy
and raw material prices; management of process safety and product
stewardship; changes in relationships with Dow's significant
customers and suppliers; changes in consumer preferences and
demand; changes in laws and regulations, political conditions or
industry development; global economic and capital markets
conditions, such as inflation, market uncertainty, interest and
currency exchange rates, and equity and commodity prices; business
or supply disruptions; security threats, such as acts of sabotage,
terrorism or war including the ongoing conflict between
Russia and Ukraine; weather events and natural disasters;
and disruptions in Dow's information technology networks and
systems; and risks related to Dow's separation from DowDuPont Inc.
such as Dow's obligation to indemnify DuPont de Nemours, Inc.
and/or Corteva, Inc. for certain liabilities.
Where, in any forward-looking statement, an expectation or
belief as to future results or events is expressed, such
expectation or belief is based on the current plans and
expectations of management and expressed in good faith and believed
to have a reasonable basis, but there can be no assurance that the
expectation or belief will result or be achieved or accomplished. A
detailed discussion of principal risks and uncertainties which may
cause actual results and events to differ materially from such
forward-looking statements is included in the section titled "Risk
Factors" contained in the Company's Annual Report on Form 10-K for
the year ended December 31, 2021 and
the Company's subsequent Quarterly Reports on Form 10-Q. These are
not the only risks and uncertainties that Dow faces. There may be
other risks and uncertainties that Dow is unable to identify at
this time or that Dow does not currently expect to have a material
impact on its business. If any of those risks or uncertainties
develops into an actual event, it could have a material adverse
effect on Dow's business. Dow Inc. and TDCC assume no obligation to
update or revise publicly any forward-looking statements whether
because of new information, future events, or otherwise, except as
required by securities and other applicable laws.
®TM Trademark of The Dow Chemical Company ("Dow") or
an affiliated company of Dow
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SOURCE The Dow Chemical Company