Dow (DOW) 25 Apr 242024 Q1 Earnings call transcript

Greetings and welcome to the Dow First Quarter 2024 Earnings Conference Call. [Operator Instructions] And as a reminder, this conference is being recorded. I would now like to turn it over to Dow Investor Relations Vice President, Pankaj Gupta. Mr. Gupta, you may begin.

morning. Good joining for today. you Thank accompanying provided posted this and are our The website. through on webcast slides I'm Dow's Pankaj President. Gupta, outgoing Investor Vice Relations today's Chief Fitterling, Officer; Jim call and Leading Executive Chief Dow's and Officer. Financial Chair Tate, Jeff are Also Andrew who joining member our you President, few a a Riker, IR was is team Investor remember, years Vice new of our Relations may ago.

to forward-looking in our to the slides. statements contained the Please information news risks subject Please filings about note, financials, items. related and otherwise public are applicable, refer our for further uncertainties. statements and exclude significant comments specified, and earnings contain where release principal cautionary all Unless

contained to GAAP news release in We refer non-GAAP will posted comparable A and slides most financial that reconciliation also our other of are website. and directly are the the measure on earnings measures. disclosures associated

for macroeconomic well our our performance. annual an cycle. milestones growth operating Jim On the the the key on Jim then agenda positions review on X update will guidance and will then for provide through as Jeff today's Slide of strategy, results first segment well our environment benchmarking. modeling call. and to results us deliver update which quarter an is will long-term our provide as

we take Following that, will your questions.

me turn Jim. over let the Now to call

and sales billion, demand, advantage volume And in improving Pankaj. & around feedstock Performance X% of you, Performance versus of gains end year-over-year increased the increased capture year-over-year. our the volume volume in with our gains X% Hydrocarbons and margin cost up strength and Intermediates second growth expansion. was from & driven by energy year advantaged positions results sequentially, consecutive markets Coatings. Coatings sequential Infrastructure. including Hydrocarbons maintained quarter, Beginning These Net and regions. and participation down were excluding rates increased Energy, We we marks reflect Materials This delivered world. to lower benefited X%, excluding Thank portfolio, & diverse quarter & the $XX.X and gains on Industrial costs. increased Dow our Slide first period in X. pricing the X% but volume Team strategically operating and Materials In by growth. led X% Energy, all Volume in the Sequentially, X%, ago we up

XX% was a Performance flow focus $XXX up on cash cash & in quarter price down modest gains Europe, Operating the Local United flat Canada. lower India, $XX enabled as EBIT East, reflecting Intermediates in from million, in & EMEAI, Coatings the the in all the conversion returns and Pacific, and Middle cash year-over-year basis. We declines Africa generation reflects shareholders. Sequentially, year-over-year $XXX decreased on XX% a driven in million offset million were quarter, flow million million, States sequentially flow to Materials was was or by by in trailing operating XX-month and Asia resulting Infrastructure. for EBIT operations gains delivered in regions. and $XXX prices Industrial of This and $XXX our

Fort We long-term where our project also PathXZero capital-efficient started construction our highly with this in Saskatchewan, advanced strategy month. return, higher earlier Alberta,

maintenance activity. million lower Europe. was driven polyethylene revenue offset ago more decreased by period, X. performance price was lower to lower and were our were year & declines planned due & the integrated business. by feedstock Hydrocarbons globally. down primarily as lighter decreased expected the than Plastics by Slide Sequentially, EBIT year-over-year costs slate segment Local to integrated Now $XXX compared Energy derivative In licensing operating segment, improved feed turning prioritizing margins. higher-value as This driven the million $XX declines operating nonrecurring primarily to Volume sales Specialty as in in Packaging $XX by polymer EBIT downstream due well primarily and on cracking to operating energy million, higher margins

equity the lower the driven to partly earnings lower and feedstock businesses, Infrastructure period. Chemicals. to lower in compared driven Industrial by Results ago Moving and costs, energy $XX operating & Sequentially, volume offset Intermediates Polyurethanes & both year by items: by energy segment. improved EBIT in gains $XX and prices EMEAI. primarily was costs, feedstock in equity EBIT in were Construction million which up million $XXX was Operating were X and improved earnings million

Performance and driven operating to period, the demand. And Materials operating by was compared by United Canada operating volume States, up million Volume $XXX and & up higher and Coatings year-over-year Latin segment, in volumes the rates. EBIT gains America. the driven driven growth seasonal improved million higher by $X ago primarily year Sequentially, EBIT increased $XX was million, overall in

Jeff over outlook review Now to to our I'll turn it and actions.

you, everyone today. Jim morning Thank call good and joining to our

X. our to on Turning Slide outlook

macroeconomic year. inflation, is improving optimism improving of regions, cautious and geopolitical we typically signs activity with close expansionary benefiting which said, rates on into is every thus interest PMI The seeing That us gives heading quarter. what industrial in seasonally territory tensions. keeping manufacturing a strong month eye a in several are far conditions from are this We U.S.

while in to March. were in while March home mid-April. production existing last activity in In also compared building were rate expanded construction through X.X% interest at X.X% building continue up fact, the manufacturing in X.X% chemical in year-to-date U.S., higher XX months year-over-year, declined Average to permits and high sales improve And year rates shipments its railcar March. fastest

levels February March manufacturing ongoing tensions which have remain Red reflects costs Sea, the PMI activity inventory in industrial geopolitical with led freight with and the July higher to are XXXX. Declines globally. partly in spending since consumer in decreasing lowest This Europe, promising indicator levels and March. In a weak at

recover in activity signs X.X% steadily to demand. improving production increased March. Economic year-over-year of with Industrial continued China in

New the sales to Year. grew Nonetheless, other prices regions through at PMI constructive. around reached the March, industrial in XX-month in March, retail highest India decline reached activity in an increased with in March. remains supported Industrial continuing manufacturing weak manufacturing Lunar remains spending Additionally, property by level XX.X. X.X% Mexico, sector new X In its home year-over-year high XX.X. production years than And further February. more in ASEAN PMI at consumer

for a quarter to as in markets in our to margins, export integrated X. global on packaging, the the strength outlook segment, polyethylene turning the In quarter. million demand continued Slide Specialty second in Now expected tailwind the & Packaging drive $XXX are higher Plastics well as resilient

from operations storm unexpected following $XX tailwinds Additionally, returned we to our which in expect has site Bahía an of million XXXX. Argentina, in Blanca, in December

due a expect increased Sabine, in we million plant Texas. primarily maintenance to headwind Lastly, $XX

Industrial & continues In Intermediates to durables segment, the demand consumer Infrastructure be muted.

margin polyols MDI on expect expansion we and in Europe. However, improved spreads

building tailwind. end and in markets We modest as $XX pharma resilient energy markets. end a demand expect improvement as seasonal well also represent in million Altogether, and construction demand these

we maintenance a $XX a to completion the Gulf planned due of PDH unit will first offset Europe This by Coast. addition, a headwind quarter. the turnaround the million and In in U.S. at in of expect be partly

$XX In are the construction siloxane Performance end global second increases quarter. Materials building drive & to demand the Coatings segment, markets in tailwind in million a seasonal prices expected higher and and

a Park in the from planned in while also million back the We PDH quarter. tailwind Deer siloxane up sites $XX first U.S., and additional maintenance at come pillar turnaround our expect an our will site following

earnings be performance. a at $XXX first above the and So company to takes, second puts we level, all approximately expect million with quarter quarter

to moving Now X. Slide

across of and the can we attractive and X-year on and benchmarking. S&P came results well and our ahead relative long-term Today, dividend average cycle be to actions, update, with execute again This to published our the and strategic economic creation As generation remains accountability value shareholder navigate cycle. we culture performance continued benchmarking our and to demonstrating our website. once the our investor The strong results in transparency, our peers. industry-leading free committed on Dow cash found pure XXX our yields. of reflects of average cash commitment broader Dow flow remuneration annual

with XX% invested the points target peer are on EBITDA invested cycle. Our across above return capital, economic capital and margins on basis the our X-year above XXX median return

delivered cycle. of reduction best-in-class us XXXX, our which priorities capital deliver allocation since also We the allows even on bottom the net debt to at

flexibility. areas to Our achievements point in and our financial discipline continued these

As for shareholder drive the to us growth through and has earnings Dow Team returns increase stage result, set the cycle. a

With that, I'll Jim. turn it back to

Thank you, Jeff.

ability while positioned reflected is Moving also capture we and are investments and continued growth cycle financial and strength. structurally earnings America, as as capture production well growth differentiated Healthy X. which oil-to-gas natural gas scale And the have the our in favor economic region. in low-cost assets, to every advancing is Dow NGL discipline. Dow's Slide operational recovery and focus and demonstrating demand advantages global a This gathers growing supported North to margin in continued by cost drive economic takes hold. early spreads, our positions competitive advantage on recovery and portfolio with improvements advantaged to

taken and incremental we in by added growth also will execute underlying grow EBITDA in capacity the mid-cycle nondurables investments segments in as attractive serve investments our our United and consumer increase Since Dow's EBITDA expected $X higher-value, billion in that and earnings approximately to that have by our States market pharma. [indiscernible] We've lower-risk our that investments including FCDh we near-term, such deliver as Europe unit to actions $XXX approximately Louisiana mid-decade. XXXX are capacity million,

and downstream silicone electronics. address fast-growing debottlenecks have in we multiple In addition, applications MobilityScience invested to in

earnings We to risk the growth our significant by and achieve up track EBITDA return cycle. higher represent investments target enabled our of a near-term Dow's on are mid-decade, the lower These of billion by next $X.X remaining portion in growth projects.

continues and growth. the X. economic of through we financial bottom Dow execute Moving discipline for Slide invest profitable industry's cycle long-term to the as to with chemical operational

with efficiency our this mechanical to glycol near-term investments month. in continue Our achieving and completion Thailand progress expansion growth propylene

our of earlier Alberta. month, installing PathXZero we're making Saskatchewan, We piles that net Fort X,XXX Grow foundation will Decarbonize new Construction our the where strategy, are on began approximately zero project the first including good also anchor of cracker. progress in & our this

have this lead cost consistent all on locking been focus time project. for in demonstrating items addition, long In further our ordered, equipment efficiencies

in leading into run ethane with to mid-cycle a have the Pembina, year an entered of of cycle. supply I barrels day and this in billion the economic transportation latest We also suppliers multiple per $X the supply agreement the with at per Overall, PathXZero up to and transport ethane. project majority rates EBITDA a secured our deliver full provider, expect over supply XX,XXX growth additional ethane agreement, to region. long-term cost-advantaged we With

continue Transform recycling a plastic a our technology Waste joint strategic This result polyethylene. be aimed expect The we million agreements. generate emissions Procter than Gamble, the near the recent to $XXX polyethylene. circularity includes Transform offtake quality which initiatives addition, run gas by virgin will recycled create through development partnerships to hard-to-recycle greenhouse Waste than In new incremental converting in, into All of lower & rate and packaging will our advance more EBITDA strategy with at and XXXX. agreement virgin via we

Turning XX. Slide to

Our created actions stronger since XXXX have Dow. a

up shareholders dividends at as Over our means bottom a any at continue as our other more of will hard build worked to implementation in past time least frame to and us strategy when flow in for EBITDA next conversion Dow's we for demonstrated resilient in This history. XX% move share created XX% And operating cycle company we the delivered strategically to consistent improve balance target profitable peak in cash has X This of in opportunity discipline. least to $XX.X XXXX, increases was EBITDA, growth at the sheet, years, we to maintains we invest the improve buybacks. billion than and peak. growth. the to This have net XX% long-term underlying the our income that higher of

you in Closing I on Investor you and want XXXX engaging Day May interest to ownership forward team on and to thank many XX. I with of look Dow. on XX, The Slide our your for

investors.dow.com. As event found be hosted will website be a New information It be reminder, Stock on from York at available More the also our can will via Exchange. the webcast. live

will $X billion in demonstrate During share progress will cycle. underlying the leadership by peak taken commitment and we And earnings creation and our market show XXXX improve that greater our earnings levels. enable well shareholder this trough we'll commitment to how, capital grow financial as by as the event, significant and verticals. consistent raising over than returns as Dow's value enhance the operational discipline, mid-cycle the our earnings priorities on to allocation and we We'll together, creates attractive

congratulate contributions like he at Andrew minute it as the President I to joining Before top of have the Investor leading over and to a we Pankaj for to Dow take our your last that leading today. Industrial Relations, charge turn also Pankaj, his next Investor I'd years our over call achievements to mentioned us forward your look incoming we Investor he Andrew team Pankaj, in Riker, X seeing and of Vice takes Day. our the business. to upcoming thank role for to Relations the Solutions

With Q&A. us the started that, with get Pankaj, please

you, Thank Jim.

let's the like that Now provide Q&A would instructions. following I to move please and to remind on both the statements your apply our questions. forward-looking remarks our Operator, prepared to Q&A. you

comes [Operator And Instructions] Hassan from Alembic Ahmed first your line Global. question the at of

a and question quick ethylene polyethylene Jim, around global fundamentals. supply-demand

out and look pretty thinks of surface, Europe. they On then producer through obviously announcements marginal right weak seem in sort at they But I I as as closures, rates, a global relatively the and now hearing utilization capacity of more of sort take mean, we're more seem economics, one slack.

out So how beyond? 'XX utilization in pan do and rates you see

there reductions the shut and negative arbitrage there's China, say, crackers a globe United supply a right highly on depending around the rates positions. have are of question. Latin some say have with good footprint very and of down. East. also I Hassan, time because seen negative you've cost there's a States a the the America focus North would pressure Middle been on window lot where we that America advantaged are I'd couple for differences China. between is in margins announcements obviously, open of and most Europe now the is and and on being big cash the of And there operating

of things all those rates led have cost-advantaged really higher to regions. operating in much the so And

we led but to the first still quarter for Europe. where was LPG operating Europe, in and quarter us little that bit higher even flexibility had And in cracking in in propane rates a first advantage high

quarter. jumped rates first XX in operating about in points percentage the overall Our Europe

Middle cost bit good. position, the in I So the a tensions things is got right a Europe pretty shipping. you've think advantage from off the looking if of and are Red effect Sea because islanded little now East

there And on for and so its volume East, on domestic has production that it's the focused been been growth has And more there. some Asian relying market demand. Middle the growth

feel I it. about good So

in volume new to growth is the growth. -- seeing of of All most of already the consecutive second we're the see starting volume And capacity numbers. market growth, and quarter volume we're year-over-year

a little we're to turn like starting feels the it So quarter bit.

Bank. of comes Deutsche the question David from from next Your line Begleiter

of beatable, walk Jim, number last the quarter, you you billion, $X.X QX up this still believe gave a bit EBITDA of to year. Do given is about an billion $X.X results? earnings that achievable, if not solid

first that the million $XXX you with results that, that and in $XXX fourth add X now think third quarter, we're from $XXX Plaquemine, go million on into I we'll the third right on so million of of numbers. would track. I David, $XXX Glycol mentioned quarter Jeff the million call, as another have kind restart quarter quarter, the

that need see run in that to to starting we right and deliver what with we're So billion. that $X.X run line rate rate

underlying And slowed. levels felt they've They talked the us I in lowest in shipments Inventory first about are it production then quarter low like chemical been. I end December to chemical be at up. demand, chemical were and destocking would last say and quarter, of continue for ever the

so when at numbers, And restocking it's not this demand driven. look right say now you feels growth volume driven, like you those

the hopefully, us pick economy trend. and us this we this momentum And start some start here to see we keeps up so move thing, as think on to I with up

the from Your question Stanley. Morgan next of Vincent from comes line Andrews

million? step million, us bridging for us walk and PSP the XQ If you that I can $XXX up tell of and just ask, $XXX world how around could to you're sort guidance that in the just

And thank margins. it's in Vincent, a you. mostly step-up integrated Yes.

for the quarter first looking they of integrated We -- of rest because had beginning world mentioned, pound it part more in back. think $X.XX improvement. quarter But the kind ], at got, a December. of about we're it's than I first in We've bit globally margin little Blanca may increase. in down, to North America a a of Europe pretty had of flat. the -- is be X storm obviously, as the one-time -- [ Bahía

see And there. so $XX improvement you'll million a

$XXX positives those So X are million.

doing Sabine turnaround at We in costs turnaround about We're this higher the $XX quarter. have million. the That's quarter.

got good. you've P&SP quarter. about the in are up numbers is the $XXX Coast. good. volume rates And million are net-net, The are second of margin So good. are Operating Exports for out the U.S. Gulf numbers flowing. good Product

of those to impacts starting positive things. we're So all see the

from comes from Mitsch Research. Fermium question next Your Frank

rates Solutions. operating And me echo appears to portfolio if How talk wishes that the wondering of that be let you positives I has Dow Industrial the also was to Best the about -- in across congratulations my general. Pankaj. in quarter. one in could Jim,

offer on front. engine your If you for XQ in and Dow beyond the some could the commentary operating on rate expectations

The United XX%, at Frank. mentioned as step-up, were XX% at have in well. about is Yes, as happy a rates. but been north were running at rates. the Argentina, that, step up quarter-over-quarter. all driver do a as of States high energy Sure. well in that, costs that demand previously to as a regions Gulf we individual globally, higher Coast, Europe saw X% lower obviously some I'd up say kind I drove Europe -- big Canada It's which high of biggest saw of level,

demand And so I'm a just sign coming. optimistic that's that, of underlying

for Europe I Latin high XX So that -- part and up. big global and America, That's step of ballpark rates the mentioned think whole up. you'd North be about with percentage -- probably a points being think America being to like I strong number good continue

Bank from of line Your from of next America. Byrne comes Steve question the

the in the investments And wanted feedstock. hydrogen-fueled have Alberta. you're Mura with you then also question the building I about to cracker pyrolysis a ask

crackers say, for unit the to, a compare of those expect projects, on you have return product at costs you downstream the would how to drive Texas-X premium those investments, price? agreements unit do to And cost? those For the sales a on

Steve, trying higher on to that is view be products, demand there. get the of unit And ethylene-based is on recover well, hydrogen-fueled strong our And the part as working it materials. for the team for say on There's the the that a cracker, price emission carbon. premium offtake. I costs would low-carbon there we through pricing that on will

greater going to or project And so returns right the on we're in. working that But on equal Texas-X now. be all are that than

when we're very going we look was with a led Texas-X be that able where in to so project the are $XX.X optimistic us you of billion at And be frame. that to deliver the about one it, peak XXXX time XXXX, in take obviously that . And projects earnings to

of feel remember, off that. I cracker, the back coming and for So X good part on which, that the reformer, we make carbon. through credits, recovered from long-term investment scale ITCs, Again, have of is incremental it through the is because with the as methane that things autothermal cost very about will we carbon of hydrogen that price the and byproducts And of get low because the Texas-X. fact the investment. Those tax competitive the then Canada

On focused demand, the recycle will shorter Mura, demand. supply for polyethylene be at looking primarily the is on which recycled right much the now Mura at on, than

state. materials. ones the change the are because for highly profitable market our steam a in there product view, in is Mura supercritical process, those it one uses so the back monomer And more And into to of the premiums today the

start-up good about that feel of the project. we So

Your comes from Spector the UBS. from question of line next Josh

of your share there of bridge that thought you could since for on update can if expectations that tracking? I cash some do for flow How you year flow cash you was you on free provide EBITDA. thoughts well? free the nonoperating on reiterated you 'XX any items kind see as this could any And wondering

pricing outlook here, Josh, was March. a through have flow Jeff, the do the think we walk improvements seen December to thing turning corner point you from low standpoint say, what as the we're to is the And one want for you year? successive and free would cash January, remember, February, we've just I the

cash quarter the quarter. in earnings higher use first make a to out of we use free of source cash flow we'll that cash the we fourth go the from generating of cash earnings. a -- and start as of But So turn in improve,

volumes Jim's would Yes. Jim. and building as we're other sales have seeing there, the the we've I improving, mention up ramp statement been started Well said, is saw also ramp quarter. sales Josh, we to thing on that see, the up the throughout

a working also So as ramping our We're up going capital anticipated. period a well, into from receivables also which are as standpoint. we turnaround heavy well

especially of the all in we our the uses that is expect line half have. of in capital cash first projections, of our the for and year would expectations with this terms of and So working

we to to the the get about into us And the Dow, mentioned, basis. like have really cash think our Jim will as see But to in into flow as volume and to ramp-up growth cash a we of continue what growth we year second we the as earnings we'll full leading good call position go the that unique sales on volume a levers. half to year, continue

If past And years, executed very of have cash that an XXXX. anywhere to you from $X that the in over look can be $X billion to billion you we and levers we've basis expect on. almost similar identified annual had on several

to on a ventures. on of working to looking in nonproduct our past, to across the our while focus producing that at can As evaluate And as structural judgment, talked we're of work make going opportunities Nova we joint we about out our capital to we that we've assets portfolio we get improvements continue our which have well. number cash continue also

from next question Mike line from Fargo. Your comes the of Sison Wells

Pankaj, Congrats, quarter. Nice again.

there XQ? then headwind -- be PSP. for Energy quickly volume you just And of core if just of siloxanes the guess, curious will I on again? XQ think terms how a versus volumes, I'm in & sort In on curious much, And why XQ Hydrocarbons be could growth improvement

Sure.

because -- storm into wanted by had materials would move been think and China impacted the we & had Bahía on broader Hydrocarbons I went because product. and we to obviously obviously, as on and to to market more just rates. say, elected focus the we the quarter operating We higher move I arbitrage, had not first Energy, into

So sales and not off America. in in are especially crackers, we North cracking light sometimes were the byproduct like for high Europe as

And leads sell. to so that of byproducts to volume less

the it's derivatives running harder. sometimes, And

was I the derivatives on ethylene volume that quarter moving continue. that more X% I we that expect making mentioned, just since first up As -- and derivatives and through was product. were will

see a So & little less bit We but volume is good on integrated we very might margins higher Energy improved on think and I plus working hard deliver that be Hydrocarbons of those quarter to you're the going the as see team volume we've first to to got growth And volumes. a numbers. the margins. number second had quarter result part strong continue

has management is data chips, in good for both good, up especially demand, price China drive automotive, EVs silicones say moved even and downstream demand think about hybrids products centers, into I'd things big. thermal when and for So you electronics, the like is continuing

bit that's thing a on the slow So is only the little side. construction

And operating so China. higher got in rates you've

You've got positive are markets territory. We've pricing. into care that better personal moving got siloxane

a say, up starting building and before already to So those step I would even we see are construction, in improve. big

the from from comes question line of JPMorgan. next Zekauskas Jeff Your

that your In and going in or strength you forecast, X% & then XXXX? up issued will sequentially. for have got And you've seasonal affect options And normally, shares issued? your will amount Infrastructure Jeff, secondly the Industrial conservative? of the Why there's flat share X% Intermediates the be what's how sequentially construction and is shares various EBITDA count markets. Or sales your in many so forecast

on We recoveries of in in Glycol think I insurance quarter Jeff, first biggest thing, to situation when quarter because in some X Plaquemine. recur first don't the that quarter. is look the the second second you II&I quarter had from the

bit that like a So a creates looks headwind. of what

the is think and business is demand underlying I the good. underlying good

If Sadara marketing Chemicals, and up a Europe at of through those offtake. little so look some Construction is we obviously, materials also volume more coming Sadara rates. of marketing less of the from step in a Sadara, Polyurethanes you & and bit operating Dow in doing see seen the we've

So slightly improved little rates is, that's a probably is driving impact. and better construction and the our that that -- biggest seeing, would But operating say bit we're Jeff? better of and cost still view just an has much obviously, seeing the Europe position insurance I delta we're thing.

then terms full of as purchase for plans. options, plan shares at XX year deferred in Dow full the as and captures Jeff, We're on issuances well employee stock, basis. this XXX(k) the a year stock looking approximately million

Vertical question from comes next Your Partners. Kevin of the McCarthy line from Research

I'd about likely the across chain. your rationalization on of you pace the capacity to Jim, ethylene like ask thoughts global

cash You seen in today. negative mentioned recent the China in weeks. rationalizations margins your competitors Europe in announce Obviously, we've some of

and of to see to of do regime think So to my come powerful drive a obviously you decarbonize? supply Europe prior question this current likely energy would be, relative combination we're in more the a cycles, out the equation cycle, on based

exactly cost But time. things Kevin, pressure cash that always a under the high-cost predict pressure standpoint we've some assets pace happening. hard from to been have been -- under are for on the

retired, thing start to the consider as when time those our are So older to we're we the would at should ramp we're -- it's asset in unit retirements. general, not of age up. and maintenance normal see you things, costs be assets likely to costs competitive. looking start It's couple assets the The you get that around the this a of

of then assets does abate have term that. about that, a And top the the And off to on what in so maintenance Europe, you is to obviously, you in, if you asset. that longer big and emissions COX cost have those not then take that going because environment do in to there to and for you're of you're depending decisions on long-term question COX. dollars And putting

are a So we've moves. policies drive about that Europe there why seen Europe of are continuing has lot to I And up. as the think obviously, first talked that's costs before, in

we've not just industries. seen it in but we So in see in We other petrochemicals steel. it see energy-intensive it

tremendously. and us ability because I in those enterprises we advantaged assets are newer LPGs that helped are been crack we've state-owned In of think China, lot of Europe to that's there. a some of our fortunate and

a may pace changes not the that. at would So on that But have we see eye it you keep just an to Europe. be in

wants ugly you're That's bleeding and ton. to the run $XXX cash talking think nobody I between about, territory. when $XXX that kind pretty of a we're

So some see changes. I to think you'll continue

comes line Your the Laurence from Alexander next of Jefferies. from question

for Estok This Kevin is Laurence. on

construction was to back Europe seen into have on if whether Just I you've shoots touch any maybe visibility restocking trends. in any you globally. green and guys seen silicone wondering in just

I trends, some No, to I improvements, existing in the down, would When starting look year-over-year see positive up, we permits good. are are which to is take some haven't though even starting things construction seen building tick sales, on say marginal big we're are to happening. see of of a trends some at Europe. restocking home starting you signs

homes North So a new new -- homes need there's for for in America sure.

start that And to see going to demand. so you're

what or start rate pretty me row, a team that business, interest tend to uptick our declines interest the products the declines, a says you we business. demand a couple we see in in polyurethanes coatings to And for see is start in business rate our to silicones when immediate to that downstream see of are

into been Personal data feel like driven, infrastructure. to closely thermal amount electronics, So deal for and that. some Those goes anything is I talked good. energy have about we're underlying strong. demand more I earlier, is Infrastructure automotive, strong. still care management. has the this of watching But with obviously Fair markets is centers, that

another we think So the in to start as step see housing, going change. we're some pickup I as to see soon

Your the comes next from Duffy Fischer Goldman question Sachs. of line from

Yes.

and Just monomers a question coatings your around business.

in for Are competitors, when guys the that your was year? paints you trending what's sense this you have at pricing QX will your their competitors down You overshipping, What's or market Sherwin, in you coatings customers think, QX. see how year? had business up then who look you where already, for not [indiscernible], level but demand do -- for be do this announced a all the you of PPG, big just in in lot happening volumes for revenue And guys?

stocking Duffy. there. going Yes, any don't think or I on there's overshipping

segment. the heavily existing then business and construction. to very sold. contractor customers existing there's painting the and or by And some homes And much new obviously, segment, that's we're are by DIY DIY when think, exposed I driven more the homes impacted new are pretty so homes

to so bottom And -- we us. see help to that tend tends that

fourth we pretty I activity strong in quarter a and had first very had had turnaround still quarter. some think, We numbers. obviously, good

So added third well quarter. and And we're that. from the be time season time can I second the think of peak also monomers demand positioned for the positive an some and to on of

doesn't it it's necessarily downstream all mean so coatings. And

out too. bit, us going markets of Some little a help could monomers the into other

comes of Your next from Mizuho. question the line Roberts John from

your Pankaj and ports with products. the congrats well were again inventory on reports Andrew Jim, downstream as Do And European again being building think jammed both chain supply about customers' warehouses Europe? and to new in roles. there there's some you

Any of? particular products, John, that thinking you're

Just chains. about the a are just economic of up issues, some I across being supply talking lot of stock, safety Sea magazines again because guess, built Red the

sure. any for plastics of seen in haven't construction don't I that polyurethanes it in know seen if I chemicals. we've see. or I

days than XX inventory, is inventory of mean, are days quarter. were sales which X better we at day we're Our low. in in of I fourth

market. not in certainly on the pretty Europe we're export I'm it in focused So as We're seeing rely don't on not an hub. Europe case. -- domestic we our And

going our mean, around. for is about X the would think -- way The So believe, Red months things the advantage year if I take of it it were I move to channels resolved is the shipping there. the rest the be think today, back that's for next probably. to I I for to Sea,

I'll there. we'll It exporting out far. it. eye an an hasn't so on us we're of And keep on just not impact just had have So to --

and still rates in expecting -- operating quarter. second we're good So

line of Your comes the question next Cunningham Patrick from from Citigroup.

in some products seeing You it increased in benefit you demand of And the as specific high higher EBITDA speak XXXX? you've the strength areas called Can projects. to called a return, quarters. of out some first that of for source which How the you're functional contribution, few for is growth time polymers meaningful demand? in incremental increased or also

Yes. markets. by to driven going be Functional primarily Polymers is infrastructure

wire it. are think is balls a is improved. part big, golf You cable Footwear of big and automotive big, sales is

energy you the about I'd the are it, those electric data transition, very AI, -- all demand, robust. beyond grids, say just power that, installations So centers hear it but new, could areas electric of could could solar be could replacement could telecom of wind, a it grid. be it existing a wiring be could farm, it center, it wind, a the offshore be be center, be it data in

All in of we're wire and we market and leader that that sell takes cable the products the jacketing.

of movements membranes I And cool a imagine membranes which on treatment would building bit tied infrastructure we're kind then for lot roofing things -- up for little for year-over-year roofing that's been water basins, efficiencies. to basins, into slow a of also We then And was do footwear, replacement. last membranes year. So water aligning set include think for big.

put our you standpoint a that color continues those. of a and on and building, for customers commercial efficiency high. demand new when very energy you'll who flat that's still install these retrofits an make roofs. work to see material anything of white, roof be with continued a a lot high light There's that So and and from We building

Solar mention, for a outer we've solar new business panels. of I that the protect we big encapsulation. solar layers PV, put the And of piece got on some PV should

and long-lasting And so up is a over picked and it's years. of product very that last is this durable couple the really

would be the those So drivers. big

from Wolfe question comes next Your of Parkinson line Chris from the Research.

for $X.XX sell back buy the May. obviously So Jim, some the increase and in then communities for and preliminary lot there's about a the been of side forth ideas and April

the Dow's sequential the Just, view U.S. anticipate where given where macro, all how but during of second USGC rates quarter given stand for consensus to basis, the in sets on view half? play and what's the right is things what your what's know ultimately the second be now, that of this? We we here, how operating out a right terms tone you view

the And have stronger, get almost indicators the up quarter. weaker. up moving The to I not first moved would macroeconomic have that the $X.XX second continued end say the numbers continued. it at quarter. We're of in

So going I it think you're the quarter. with think the consumer volume the that up we're to seeing move on the in downstream being second derivatives with see and improved strong, I still economic business

as we're at improvement the I And started December of we the mentioned, end just low I very [ and the the April. we So on X through ] at saw think steady first point quarter. firm

off a higher we're at And so move some to much rate as I the and second through we start see momentum think quarter that quarter.

from Your Mike next question from the Leithead of comes Barclays. line

I year, for hit to are EBITDA earlier cash year a working what of capital targets you guess, roughly of magnitude? wanted a or use for ask to you a question be to cash flow, Jeff. if I on this forecasting your to an follow-up source this cash maybe and

improvements a year as on that we see start of cash for full through, question use again, being the yes, improve number where it relation Mike, cash corner. from today, the from a we earnings But turn basis. recovery earlier again, our to basis of on we're in at are will on dynamics based anticipating, a be volume as it mentioned here. full capital coming working way right, our we coming will I that we of work a But a actually to year that we're looking still use on the Josh's the

-- the from sorry, of from Markets. KeyBanc comes RBC Capital line Aleksey question Capital Yefremov next Your

on of mid-cycle come more improvement? I follow-up, downstream relative therefore, silicones improvement margins And optionality to And saw back silicone are downstream? to what's where or want the the a as silicones expectations? the Was silicones. upstream sort that you your downstream side for to your

saw from building electronics. and in products we personal saw saw where it's the some we are and saw as care. downstream. chemical improvements gains We were used intermediates. saw both. pricing We processing, and in in in better mobility saw consumer industrial and gains gains of primarily We We gains which better in infrastructure, saw seasonality We on and demand better driven. Aleksey, siloxanes

downstream the all demand rates siloxanes pricing on was markets The up. The were siloxanes The were operating were up. up. up. So

So it both sides. pretty was balanced on

from Arun Capital from question Viswanathan Markets. RBC next comes Your the line of

I hope good Pankaj, and as with you, you guys well working well. are

billion is, now you how $X you're guess I of maybe billion? -- so based? are bridge to kind $X.X is do the mid-cycle my as there additions? going volume annual is billion, to EBITDA. as of capacity that $X.X that billion, recovery -- is any run maybe think billion, out rate case, And And of, billion say, is be level if that $X.X call still Do $X.X Or from mainly $X.X it you'd billion, $X question items far you would around going discrete a that on

run top right you're of think Yes, the Arun, I on rate.

is our mid-cycle I there. of comments view I mean, mid-cycle no to probably think billion. closer $X So do --

obviously, to is to to another Volume it. a so of And mid-cycle get we step-ups run rate, to of there. get have couple part have that big

the that's of projects, on equal in So some that the the in put as step-up. all rest flight right I $XXX that that we're mentioned, step-up million already we've billion place now, of that another call $X.X the and

So $X is volume. that billion all of margins improved

year of And finished most next been be is of that year. or this will and CapEx beginning either

So Obviously, comes that. in I Alberta about PathXZero good the feel later.

Phase 'XX getting we're coming think towards to to you billion is that that's next a as in, time frame 'XX 'XX $X is X, see Phase more I where 'XX X. So can the That's peak.

our right we've if we next up got the intended, that we timing got get what and and running so into before that's we And peak. was

volume on the us we've of all that that to from When trajectory. which I to come unpack then the so that sight into that's line volume going got $X XX, think to next of and to stuff we've get got peak And is the XXXX, And we're the line mid-cycle. billion to type than by May going greater economics. we Day gets sight here Investor

rates that's excellent where growth for are, from of both we them. And

on cycle. the of through the feel And been so worst here it slowdown I the like in we've

And should here from downside so be it out. upside than more

will question-and-answer our concludes the back conference now That for to turn closing remarks. Gupta I session. over Pankaj

Dow. call joining thanks, for our and and Thank you, Christa interest your in everyone, appreciate we

a reference, on will transcript our call. This concludes again. XX once be Dow's our For hours. copy posted your of within Thanks website

today's may conference for participation now you This your call. concludes Thank you and disconnect.