Honeywell

Honeywell is a global software-industrial company providing products across aerospace, building solutions, performance materials and safety.

Employees: 99,000

Revenue: $35.466B for FY2022

Headquarters: Charlotte, North Carolina, USA

What they do:

Global manufacturing company, with four reporting segments: Aerospace, Honeywell Building Technologies, Performance Materials and Technologies, and Safety and Productivity Solutions
52% of sales come from outside of the US

Their Vision and Priorities

Driving profitable growth by delivering innovative products
Continuing to execute on our strategy to be a premier software-industrial company, including the ongoing expansion of Honeywell Forge and driving a recurring revenue model across the Company.
Expanding margins by optimizing the Company’s performance through the Integrated Supply Chain and Honeywell Digital transformation initiatives
Executing disciplined portfolio management through rigorous merger and acquisition, divestiture, and integration processes
Controlling corporate costs,
Increasing availability of capital through strong cash flow generation and conversion from effective working capital management and proactive management of debt
Committing to uphold our environmental, social, and governance principles (committed to being carbon neutral in their operations and facilities by 2035)

What is Honeywell Forge?

Honeywell Forge is an enterprise performance management solution for digital transformation of operations. Honeywell Forge includes a mix of software products and enabling services that help companies use operational data to drive insights that improve processes, enhance productivity, support sustainability initiatives, and empower workers;

Learn more

What does each business unit do?

Aerospace

Aerospace is a global supplier of products, software and services for aircraft that it sells to original equipment manufacturers (OEM) and other customers in a variety of end markets including: air transport, regional, business and general aviation aircraft, airlines, aircraft operators, and defence and space contractors.

Honeywell Building Technologies

Honeywell Building Technologies is a global provider of products, software, solutions and technologies that enable building owners and occupants to ensure their facilities are safe, energy efficient, sustainable and productive. Honeywell Building Technologies products and services include advanced software applications for building control and optimization; sensors, switches, control systems and instruments for energy management; access control; video surveillance; fire products; and installation, maintenance and upgrades of systems.

Performance Materials and Technologies

Performance Materials and Technologies is a global leader in developing and manufacturing high-quality performance chemicals and materials, process technologies and automation solutions. The segment is comprised of Process Solutions, UOP (Universal Oil Products), and Advanced Materials.

Safety and Productivity Solutions

Safety and Productivity Solutions is a global provider of products and software that improve productivity, workplace safety, and asset performance to customers around the globe. Safety products include personal protection equipment (PPE), apparel, gear, and footwear; gas detection technology; and cloud-based notification and emergency messaging.

Things to know

Final court approval of their buyout agreement with the NARCO Trust, providing the elimination of their funding obligations in exchange for their $1.325 billion cash payment to the trust. This liability has been weighing on their balance sheet since 2002, one of the numbers of legacy liabilities the company has been carefully managing. They recognized the charge from the buyout in the fourth quarter, and the cash outflow took place in January.
Partially offsetting the impact of the buyout is the sale of Harbison-Walker International, the reorganized and renamed entity that emerged from the NARCO bankruptcy, which announced that and will be acquired from the Trust by private equity firm, Platinum Equity. They expect this transaction to be completed later in 2023, reducing the net free cash flow impact by approximately $300 million. This development represents a significant improvement in their financial strength. Specifically, it simplifies their balance sheet by eliminating their evergreen funding obligations, eliminates quarterly asbestos charges related to NARCO and extinguishes any further uncertainty on their company's financial health.

Competitors

Financial Calendar

Q1 - Jan-Mar - Earnings 29th April

Q2 - Apr-Jun - Earnings 28th July

Q3 - Jul-Sep - Earnings 27th October

Q4 - Oct-Dec - Earnings 2nd Feb

Next Earnings Report

29th April 2023

Highlights from last earnings report

Honeywell sales for the fourth quarter were up 6% year over year on a reported basis and 10% year over year on an organic basis .
Aerospace sales for the fourth quarter were up 11% year over year on an organic basis led by commercial aviation.
Sales growth was the strongest in commercial original equipment, increasing 25% organically year over year on increased ship set deliveries, especially to business and general aviation customers.
Commercial aftermarket sales also grew over 20% organically year over year as flight hours continue on their recovery path to pre-COVID levels.
Air transport aftermarket was particularly strong, growing 25% organically in the quarter. Increased commercial aviation sales were partially offset by lower defense volumes year over year, although defense and space sales increased 15% sequentially in the fourth quarter.
Segment margin contracted 120 basis points to 27.8% driven by increased sales of lower-margin original equipment products, partially offset by commercial excellence.
Honeywell Building Technologies sales for the fourth quarter were up 15% on an organic basis year over year with strength in both building products and building solutions.
Building product sales increased 21% organically, primarily driven by increased sales of fire products and building management systems.
Project sales grew double digits organically for the third consecutive quarter, leading the growth in building solutions.
Segment margin expanded 370 basis points to 24.8% due to commercial excellence, partially offset by cost inflation.
Performance Materials and Technologies sales for the fourth quarter were up 15% on an organic basis year over year despite an approximately 4% headwind from Russia.
Sales growth was led by more than 30% organic growth in fluorine products within advanced materials and refining catalyst shipments in UOP, as well as Honeywell organic growth in thermal solutions and lifecycle solutions and services within process solutions.
Segment margin contracted 100 basis points to 22.0%, primarily driven by cost inflation and higher sales of lower-margin products, partially offset by commercial excellence.
Segment margin grew at the fastest rate ever for SPS, expanding 940 basis points to 20.2% as a result of commercial excellence, improved sales mix, and productivity actions, partially offset by volume leverage and cost inflation. Conference Call Details Honeywell will discuss its fourth-quarter results and full-year 2

Challenges from the last earnings report

Safety and Productivity Solutions sales for the fourth quarter decreased 5% on an organic basis year over year. Growth in sensing and safety technologies was offset by lower volumes in productivity solutions and services and warehouse and workflow solutions