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- 1. ® Jerome Peribere President and CEO Dow AgroSciences Merrill Lynch Agrochemicals Conference June 5, 2008 ®Trademark of The Dow Chemical Company
- 2. Commodity Prices Buoyed by Strong Demand Trading volatility since 2006 ® 2 JP: June 5, 2008 ®Trademark of The Dow Chemical Company
- 3. Dow AgroSciences Growth Ahead of Market Trend ® $Billion Sales 6% CAGR $4.0 $3.5 $3.0 $2.5 $2.0 2001 2003 2005 2007 23% CAGR $Million EBIT* $600 $500 $400 $300 $200 $100 $0 2001 2003 2005 2007 *Non-GAAP financial measure, excludes certain items 3 JP: June 5, 2008 ®Trademark of The Dow Chemical Company
- 4. Outstanding Momentum Continued in First Quarter ® Sales EBIT* $Million $Billion 27% Growth 17% Growth 1.4 350 1.2 300 1.0 0.8 250 0.6 0.4 200 0.2 0.0 150 1Q07 1Q08 1Q07 1Q08 All-Time Record Quarter – Sales and EBIT Strong Volume Growth in all Geographies Growth in Local Pricing 4 JP: June 5, 2008 *See www.dow.com for reconciliation of Non-GAAP financial measure ®Trademark of The Dow Chemical Company
- 5. Investment Drives Growth and Returns ® Growth 2001-2010 2001-07 CAGR Goal Actual CAGR Ag Chem Pipeline 5% 6% SALES CAGR $1 Billion Corn Business 2% 1% SARD CAGR Technology 16% 23% Leadership EBIT* CAGR *Non-GAAP financial measure, excludes certain items 5 JP: June 5, 2008 ®Trademark of The Dow Chemical Company
- 6. Ag Chem Pipeline is Robust ® Ag Chem Pipeline Extending “green” insecticides Growth Resistance Growth Components breakers - New Product Launches Ag Chem Pipeline - Segmentation Filling needs unmet by $1 Billion Corn Business biotechnology Excellent Technology combination Leadership partners 6 JP: June 5, 2008 ®Trademark of The Dow Chemical Company
- 7. Pipeline Builds and Expands Agricultural Chemicals Success ® Ag Chem Pipeline Aminopyralid Pyroxsulam Spinetoram New Insecticide New Resistance Replace and Patented/ Extends “green” broad-spectrum 1 insecticides breaker expand strategy cereal herbicide Generic Balance To be Registered in 4 Excellent fit Geographic Registered in countries; many Global potential 2 globally Balance others to follow 45 countries Fits growing need Pastures/ Excellent Opens new Portfolio unmet by Cereals/ combination 3 market space Breadth biotechnology Oilseed rape partner Expedited Launches Launching Launched in 2007, 4 Future Pipeline Timeline continue in 2008 2008 continues in 2008 Maturity Sales Maturity Sales Maturity Sales For large (>$2B) Channel 5 >$300MM >$170MM >$100MM market segment Strength 7 JP: June 5, 2008 ®Trademark of The Dow Chemical Company
- 8. Segmentation Enables Growth as Market Moves to Our New Product Space ® Ag Chem Pipeline Cereal Herbicide Market in 2015 Grass weed segment will decrease to 15% 1% 8% 15% 38% Broad Leaf Weeds Cross Spectrum 38% Grass Weeds Burndown Others Cereal Herbicide Market in 2008 Cross Spectrum segment will 1% increase to 38% 10% 27% 41% Broad Leaf Weeds Cross Spectrum 21% Grass Weeds Burndown Others Source: Agrobase 8 JP: June 5, 2008 ®Trademark of The Dow Chemical Company
- 9. Cereal Herbicides Mix Strategy Delivers Customer-Valued Solutions Ag Chem Pipeline ® New Product Launches Florasulam Pyroxsulam STARANE™ Future New Cereal Herbicide Portfolio % Total Sales 100% Three-Way Mixture (Patented) Three-Way Mixture (Patented) Three-Way Mixture (Patented) Three-Way Mixture (Patented) 90% 80% 70% Two-Way Mixture (Patented) Two-Way Mixture (Patented) Two-Way Mixture (Patented) Two-Way Mixture (Patented) 60% Single Entity (Patented) Single Entity (Patented) 50% 40% Single Entity (Patented) 30% Single Entity (Off Patent) Single Entity (Off Patent) 20% Single Entity (Patented) Single Entity (Off Patent) 10% Single Entity (Off Patent) 0% Pre-2000 2003 2007 2011 Enables new concepts for growth in multiple markets Strengthens product performance Replaces off-patent chemistry with proprietary mixtures 9 JP: June 5, 2008 ™Trademark of Dow AgroSciences LLC ®Trademark of The Dow Chemical Company
- 10. Building a $1 Billion Corn Business $1 Billion Corn ® Business Germplasm Acquisitions Growth Access to Ag Chem Pipeline DeKalb hybrids Growth Components $1 Billion Corn - Germplasm progress Business Geographic - Channel access Acquisitions Technology Leadership SmartStax™, DHT Family of Traits 10 JP: June 5, 2008 ™Trademark of Monsanto Technology LLC ®Trademark of The Dow Chemical Company
- 11. Multiple Modes of Action for Insect and Weed Control Open New Acreage Opportunities $1 Billion Corn Business ® +50 MM acres of corn require a ~20% refuge Above Ground Potential +8MM additional acre opportunity SmartStax™ + DHT Below Ground Increase of Glyphosate Resistant Weeds Herbicide Tolerance DHT Source: University and public data ®HERCULEX is a trademark of Dow AgroSciences LLC; SmartStax, YieldGard and Roundup Ready are trademarks of 11 JP: June 5, 2008 Monsanto Technology LLC. ®Trademark of The Dow Chemical Company
- 12. By 2012: HERCULEX® the Leading IR Trait $1 Billion Corn Business ® Penetration of HERCULEX Traits of Total U.S. Corn Acres Share 70% 60% HERCULEX® + 50% SmartStax™ 40% HERCULEX®+ 30% SmartStax™ launch 20% 10% HERCULEX® 0% 2007 2010E 2012E IR= Insect Resistance 12 JP: June 5, 2008 ®HERCULEX ®Trademark of The Dow Chemical Company is a trademark of Dow AgroSciences LLC, ™SmartStax is a trademark of Monsanto Technology LLC.
- 13. Acquisitions Illustrate Disciplined, Effective Progress $1 Billion Corn Business ® More to come! Growing channel for SmartStax™ opportunity Complementary growth for Mycogen Seeds Marketed under current brand Run independently 13 JP: June 5, 2008 ™Trademark of Monsanto Technology LLC ®Trademark of The Dow Chemical Company
- 14. Technology Leadership Technology Leadership ® Growth Ag Chem Pipeline Dow Herbicide Tolerance Traits $1 Billion Corn Business Growth Components DHA Omega-3 - Next Generation Herbicide Technology Tolerance Fatty Acid Leadership - Improved food ingredients - Gene regulation Zinc Fingers 14 JP: June 5, 2008 ®Trademark of The Dow Chemical Company
- 15. Farmers Need Dow Herbicide Tolerance Family of Traits Technology Leadership ® Confirmed and Developing (Suspected) Resistance to Glyphosate Revolutionary new family of traits with exceptional performance 13 Weed Examples: Provide tolerance to multiple classes of herbicides Horseweed Giant Ragweed The best competitive traits to improve the 9 Common Ragweed performance of herbicide-tolerant cropping systems Palmer Amaranth such as glyphosate 7 Waterhemp Anticipated Launch: Hairy Fleabane 5 Corn: 2012 Ryegrass spp Cotton, Soybeans: 2013 Johnsongrass Junglerice Sourgrass Global Confirmed Broadleaf Grasses Suspected Broadleaf Grasses Source: International Survey of Herbicide Resistant Weeds and public literature Dow’s Herbicide Tolerance Trait solutions uniquely provide selective use of multiple modes of action for both broadleaf and grass weed resistance management Transformed Untransformed 15 JP: June 5, 2008 ®Trademark of The Dow Chemical Company
- 16. Adds More Power to Technology Share Technology Leadership ® Targets for Share of U.S. Acres in 2015 with Dow Herbicide Tolerance Technology Share Just Announced: 70% Dow AgroSciences, Mertec LLC, 60% M.S. Technologies LLC Collaborate to Bring New 50% Soybean Technologies to U.S. Soybean Growers 40% 30% 20% Cotton Corn Soybeans 10% 0% 16 JP: June 5, 2008 ®Trademark of The Dow Chemical Company
- 17. DHA a Preferred Omega 3 for Human Diet Technology Leadership ® The Value Proposition The Distinct Health Benefits of Dow AgroSciences to produce DHA-rich canola oil, Martek to market An economical vegetarian source of DHA rather than fish or fish oil alternatives Technology opportunity to help consumer have healthier diet One of first traits to market that will help provide this essential nutrient for human health Gene set with simpler biosynthetic process than competitors’ approaches, produces DHA with fewer intermediates DHA=Docosahexaenoic Acid EPA=Eicosapentaenoic Acid ALA=Alpha-Linolenic Acid 17 JP: June 5, 2008 ®Trademark of The Dow Chemical Company
- 18. Exciting Progress Being Made with Zinc Fingers Technology Leadership ® The Best Technology for Rapid Product Development and New Applications Zinc finger proteins afford the broadest and most flexible range of capabilities for gene targeting, gene editing and gene regulation Enable precision engineering of genomes to eventually deliver “Designer” crops Milestones Achieved and In Progress 2008 Milestones Just Announced! • Have achieved precision Gene Editing insertion of a proprietary gene • Targeted sequence modification of a native gene to enable rapid stacking with • Targeted regulation of native gene expression existing traits Distribute the Technology • Have proven activation and • Establish collaborations with leading academic researchers • Develop technical partnerships in new fields with private companies repression of native genes • Intention is to sublicense the technology broadly, including other associated with seed oil companies in the plant field biosynthesis in canola plants 18 JP: June 5, 2008 ®Trademark of The Dow Chemical Company
- 19. Pipeline Reinforces Technology Leadership Future ® Discovery Development Launch Advanced in 2007 Advanced in 2008 ECOZOME™ Fungicide Chemical Solutions NDS*1 Herbicide Herbicide NDS*2 Herbicide NDS*3 NDS*4 Fungicide Sap Feeding Insecticide Chewing Insecticide Healthier Oil Healthier Oil Trait 2 Trait 3 DHT SmartStax™ Trait 1 Insect DHT Biological Solutions Trait 2 New Venture Trait 2 Oilseed Breeding Enhancement Nutrition Stress Trait 1 Healthier Oil Nutrition Trait 1 Trait 1 Trait 3 New Venture Healthier Oil Insect Trait 4 Healthier Oil Trait 1 Yield Trait 1 Trait 5 Animal Health Animal Health Vaccine 3 Animal Health Nutrition *Novel Delivery System Vaccine 2 Vaccine 1 Trait 2 19 JP: June 5, 2008 ®Trademark of The Dow Chemical Company ™Trademarks of Dow AgroSciences LLC, SmartStax is a trademark of Monsanto Technology LLC.
- 20. Investment Drives Growth and Returns ® Growth 2001-2010 2001-07 CAGR Goal Actual CAGR Ag Chem Pipeline 5% 6% SALES CAGR $1 Billion Corn Business 2% 1% SARD CAGR Technology 16% 23% Leadership EBIT* CAGR *Non-GAAP financial measure, excludes certain items 20 JP: June 5, 2008 ®Trademark of The Dow Chemical Company
- 21. SEC Disclosure Rules ® Some of our comments today include statements about our expectations for the future. Those expectations involve risks and uncertainties. Dow cannot guarantee the accuracy of any forecasts or estimates, and we do not plan to update any forward-looking statements if our expectations change. If you would like more information on the risks involved in forward-looking statements, please see our annual report and our SEC filings. In addition, some of our comments reference non-GAAP financial measures. Where available, a reconciliation to the most directly comparable GAAP financial measures and other associated disclosures are provided on the internet at www.dow.com in the Financial Reports page of the Investor Relations section. 21 JP: June 5, 2008 ®Trademark of The Dow Chemical Company
- 22. ® ®Trademark of The Dow Chemical Company