10-KPeriod: FY2023

DOW INC. Annual Report, Year Ended Dec 31, 2023

Filed January 31, 2024For Securities:DOW

Summary

Dow Inc. reported net sales of $45 billion for the fiscal year ended December 31, 2023, a decrease of 22% compared to 2022, driven by a 16% decline in local prices and a 6% decrease in volume across all operating segments and geographic regions. This performance reflects a challenging macroeconomic environment with slower global activity, impacting supply and demand dynamics. Despite the top-line decrease, the company is actively investing in its long-term strategy, including projects focused on decarbonization and circular economy initiatives, such as the net-zero ethylene cracker in Alberta, Canada, and advanced recycling partnerships. Dow's financial position remains solid, with substantial liquidity and a strong balance sheet, though capital expenditures are expected to increase in 2024 to support strategic projects. The company also continues its commitment to shareholder returns through dividends and share repurchases, aligning with its long-term strategy. Management's outlook for 2024 anticipates moderately improving macroeconomic conditions supporting demand, particularly in packaging and specialty plastics, while acknowledging ongoing pressures in industrial intermediates and infrastructure due to capacity additions. The company's focus on innovation, customer-centricity, and sustainability positions it for future growth and value creation.

Financial Highlights

53 data points
Beta

Revenue

$44.62B

10.9% Gross Margin

Net Income

$589.00M

1.3% Net Margin

EPS (Diluted)

$0.82

Total Assets

$57.97B

Cash & Equivalents

$2.99B

Free Cash Flow

$5.20B

Financial Statements
Beta
Revenue$44.62B
Cost of Revenue$39.74B
Gross Profit$4.88B
SG&A Expenses$1.63B
Operating Income$660.00M
Interest Expense$746.00M
Net Income$589.00M
EPS (Basic)$0.82
EPS (Diluted)$0.82
Shares Outstanding (Basic)705.70M
Shares Outstanding (Diluted)709.00M

Key Highlights

  • 1Net sales decreased by 22% to $45 billion in 2023, primarily due to lower prices and volumes driven by a challenging macroeconomic environment.
  • 2Operating EBIT declined significantly across all segments, reflecting decreased selling prices and lower demand.
  • 3The company is progressing on key strategic investments in sustainability, including its net-zero ethylene cracker in Alberta, Canada, and initiatives to advance a circular economy for plastics.
  • 4Dow continues to prioritize shareholder returns, with dividends paid totaling $1,972 million in 2023 and $625 million in share repurchases.
  • 5The company maintains a strong liquidity position with $2.99 billion in cash and cash equivalents and $12.8 billion in total liquidity at year-end 2023.
  • 6Restructuring actions initiated in 2023 resulted in $528 million in charges, aimed at improving structural costs and long-term competitiveness.
  • 7Despite a challenging year, Dow received numerous awards for innovation, sustainability, and workplace culture, highlighting its commitment to ESG principles and technological advancement.

Frequently Asked Questions

Dow reported net sales of $45 billion for the year ended December 31, 2023, a decrease of 22% compared to $56.9 billion in 2022. This decline was driven by a 16% decrease in local prices and a 6% decrease in volume across all operating segments and geographic regions. Net income available for common stockholders was $589 million, or $0.82 per share, down from $4,582 million, or $6.28 per share, in 2022, reflecting the challenging market conditions.

Dow is making significant investments in its sustainability strategy, focusing on decarbonization and the circular economy. Key initiatives include the construction of the world's first net-zero Scope 1 and 2 CO2e emissions integrated ethylene and derivatives complex in Alberta, Canada, and partnerships to advance advanced recycling of plastics with companies like Mura Technology. The company also plans investments in clean hydrogen production and the deployment of small modular nuclear reactors for clean power at its Seadrift, Texas site.

Dow expects to maintain financial and operational discipline in 2024. While anticipating continued softness in industrial and durable goods demand in the first quarter, the company sees encouraging early signals in sectors like construction, automotive, and consumer electronics. Dow anticipates moderately improving macroeconomic conditions to support demand growth, particularly in higher-value functional polymers and specialty packaging, with integrated margins expected to improve in the second half of the year.

Dow maintains a strong balance sheet and liquidity. In 2023, the company paid dividends totaling $1,972 million and repurchased $625 million of its common stock, consistent with its long-term strategy to return approximately 65% of operating net income to shareholders through dividends and share repurchases over the economic cycle. Capital expenditures are expected to be approximately $3 billion in 2024, reflecting continued investment in strategic growth projects, including the Fort Saskatchewan Path2Zero project.