Dow launches "Transform to Outperform" to raise the competitive industry benchmark for productivity and growth to enable improved returns
- Targeting at least $2 billion near-term Op. EBITDA improvement
- Actions aim to radically simplify the Company's operating model, streamline its processes, reset its cost structure and modernize how it serves customers
- Benefits will be accretive to 2025 earnings levels and Dow's previously announced $1 billion cost savings program
Dow announced a comprehensive plan to simplify how it operates and streamline its end-to-end processes. The Company will also reset its cost structure and modernize how it serves customers. Transform to Outperform targets the addition of at least $2 billion in near-term Op. EBITDA, in part by utilizing AI and automation to deliver step change in growth and productivity and improve shareholder returns.
A simpler, more efficient Dow. "The goal of Transform to Outperform is to achieve significant growth and productivity gains that elevate Dow's competitive position," said Karen S. Carter, Dow's chief operating officer. "We are building on the momentum of our current self-help measures – transforming Dow into a company that is more resilient, consistently delivers growth, enables customer success, and delivers greater shareholder value across the cycle."
Key transformation goals & benefits. This work represents an ongoing intensive, company-wide analysis and Dow has established a dedicated internal team to guide the transformation. The Company expects to provide at least $2 billion in near-term Op. EBITDA uplift. Dow's current projections are that approximately two thirds of the benefits will be from productivity improvements and one third from growth.
The Company anticipates ~$1.1-1.5 billion in one-time costs associated with Transform to Outperform, including ~$600-800 million in severance for ~4,500 Dow roles and ~$500-700 million in other one-time costs.
A commitment to long-term strength and competitiveness
"Transform to Outperform will drive significant simplification in how work gets done, aimed at ensuring Dow's continued global leadership," said Jim Fitterling, Dow chair and CEO. "By leveraging best-in-class, cross-industry processes and leading-edge technologies, this work will further accelerate measures we have already taken to address the prolonged trough and structural industry challenges. Our efforts will build on Dow's strong focus on safe and reliable operations while driving increased accountability and continuous improvement. This work aims to deliver improved growth, productivity and shareholder returns."
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.
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