Dow Chemical 2009 Annual Report Download - page 6

The Right Elements for Success
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THE RIGHT PORTFOLIO
The Dow of Today operates three
integrated business models with more
high-growth, high-margin, technology-rich
businesses than ever before. The 2009
acquisition of Rohm and Haas shifted
our business portfolio, which is now
two-thirds comprised of Advanced
Materials, AgroSciences and Performance
businesses, where science and research
and development (R&D) capabilities fuel our
growth. Rohm and Haas is the key element
in building Dow’s new Advanced Materials
Division, which includes electronic materials,
coating materials, building and construction
products, specialty materials, and adhesives
and functional polymers. These are all
high-customer-touch businesses with strong
technology positions and broad geographic
reach that will lead us to significantly
improved earnings in the years ahead.
u THE RIGHT COST STRUCTURE
Dow is focused on driving financial
performance by reducing debt, increasing
operating earnings while reducing
volatility over time, and achieving a higher
return on capital and equity. In 2009, we
exceeded our ambitious structural and
cost synergy goals, realizing savings of
more than $1.2 billion. We also retired all
Series B and C preferred shares from our
capital structure at par and reduced long-
term debt with maturities through 2011
by 80 percent. Through the execution
of our 2009 divestment program, Dow
reduced total indebtedness by more than
$2.5 billion since April 1, 2009. These
actions lowered our net debt-to-total
capitalization ratio to 48 percent, ahead
of our target, and reduced the Company’s
financing costs by $500 million per year.
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THE RIGHT STRATEGY
Our strategy is to preferentially invest
in a portfolio of technology-integrated,
market-driven businesses that create
value for our stockholders and growth
for our customers. The strategic themes
of Financial Discipline, Sustainability,
Performance Culture and Profitable
Growth have guided the transformational
steps we have taken to establish Dow as
a high-performance, earnings-growth
company. On the Basics side, we will
manage a portfolio of asset-integrated,
building-block businesses to generate
value for our downstream portfolio. On
the Performance side, we are investing in
science-based innovation and sharpening
our customer focus to create businesses
and brands that will deliver higher margins
and more consistent profitability.
Right. Now. These two words describe the determination and the spirit of urgency
that guided our actions in 2009. Dow has the right elements in place for success.
We have the right portfolio and the right focus on financial discipline. We are involved
in the right sectors, where we see strong growth and favorable long-term fundamentals.
We are investing in the right innovations. And we have the right geographic balance
to capture growth in emerging regions of the world. These elements for success will
allow us to continue to execute from a position of strength and leadership. We invite
you to read why.
4The Dow Chemical Company