Honeywell International Inc. (NASDAQ:HON) Citi’s 2024 Global Industrial Tech and Mobility Conference February 20, 2024 8:00 AM ET Company Participants Vimal Kapur - CEO Conference Call Participants Andrew Kaplowitz - Citi Andrew Kaplowitz We're going to get started. Again, appreciate everyone joining us. For those of you who weren't at our first meeting, early risers, again, welcome to Citi's Global Industrial Tech and Mobility Conference. We are very excited to have Honeywell with us. We've got Vimal Kapur ...

Honeywell International Inc. Conference Call Summary Company Overview - **Company**: Honeywell International Inc. (NASDAQ: HON) - **Event**: Bank of America Securities 2023 Financial Services Conference - **Date**: June 14, 2023 - **Participants**: Greg Lewis (CFO), Joe O'Dea (Wells Fargo) Key Points Financial Outlook - Honeywell reaffirmed a growth algorithm of **4% to 7%** and margin expansion of **40 to 60 basis points** [2] - Gross margin target set at **40% or more**, currently at **37%** [2] - Recurring revenue base is about **one-third** of the portfolio, with a target to grow it over **35%** [3] - Capital deployment expected to exceed **$25 billion** over the next three years [3] - Upgraded margin expectations for HPT to **27%** and SPS to **20%** [3] Demand and Market Trends - Strong demand in aerospace and defense, with an upgraded outlook to low-double-digits growth [4] - China’s market is improving, with low-single-digit growth in Q1 accelerating in Q2 [7] - Aerospace demand remains solid despite supply chain challenges, with normalization expected in short-cycle businesses [8] - Past due backlogs in aerospace continue to grow due to strong demand [12] Supply Chain and Pricing - Supply chain issues are bifurcated: semiconductor shortages are more concentrated, while aerospace faces skilled labor shortages [14][15] - Improvement in supplier commitments and reduced decommit rates, leading to better output [16] - Honeywell achieved **10% price increase** in 2022, with a more nuanced pricing strategy for 2023 [18][19] - Confidence in maintaining positive price-cost dynamics across the portfolio [20][24] M&A Strategy - Honeywell is focusing on M&A with a target of **two to four deals annually** [45] - The current capital markets environment is favorable for Honeywell due to a strong balance sheet [44] - Increased bandwidth for M&A activities as integration efforts from previous transformations are winding down [42] Segment Insights - **Aerospace**: Expected mid-single-digit organic revenue growth, with strong demand for commercial aerospace and defense [46][48] - **HBT (Honeywell Building Technologies)**: New construction represents about **10%** of total demand, with a focus on institutional customers [50] - **PMT (Performance Materials and Technologies)**: Targeting sustainable technologies, aiming to grow this segment to a **$1 billion** business [56] - **SPS (Safety and Productivity Solutions)**: E-commerce trends remain strong, with expectations of a bottoming out in revenue trends by the end of 2023 [61][62] Digital Transformation - Honeywell is reducing ERP systems from **150 to 10**, enhancing operational efficiency and data integration [36][39] - Focus on creating a digital infrastructure that supports various business models, improving customer experience and operational metrics [29][33] Conclusion - Honeywell is positioned for growth with a robust financial outlook, strong demand across key segments, and a strategic focus on M&A and digital transformation initiatives. The company is navigating supply chain challenges while maintaining pricing power and exploring sustainable technology opportunities.

Honeywell International Inc. (NASDAQ:HON) Citi’s 2023 Global Industrial Tech and Mobility Conference February 21, 2023 8:00 AM ET Company Participants Greg Lewis - SVP and CFO Conference Call Participants Andy Kaplowitz - Citigroup Andy Kaplowitz All right. I think we're going to get started. Very happy for you all to be here. Again, most of you know me. I'm Andy Kaplowitz from Citigroup. Very excited to welcome you to the Citigroup Industrial Tech & Mobility Conference. We've got a great lineup for you guy ...