Honeywell Aerospace FY Conference Summary Company Overview - **Company**: Honeywell International (NasdaqGS: HON) - **Division**: Honeywell Aerospace - **CEO**: Jim Currier, appointed in August 2023 - **Spin-off**: Planned spin-off of Boeing as an independent entity in 2026 [2][3] Key Industry Insights Aerospace Market Position - Honeywell Aerospace is set to become one of the largest pure-play aerospace suppliers post-spin-off, allowing for focused strategic decisions [3][4] - The company aims to leverage its investment-grade balance sheet for future growth opportunities [4][5] Market Segmentation - Honeywell serves multiple end markets: commercial air transport, business aviation, and defense space [9][10] - The portfolio includes electronic solutions, digital power systems, and control systems, covering a wide range of aircraft components [10][11] Financial Performance - The company has maintained a strong operating system focused on productivity, efficiency, and margin expansion, leading to consistent margin performance [12][13] - Investments in new technologies and products are at or above industry peers, with a focus on sustaining a long-term growth profile [13][14] Market Dynamics Business Jet Market - Post-COVID, business jet flight hours surged to 20% above pre-pandemic levels but are expected to normalize to low single-digit growth [18][19] - The air transport market shows stronger growth potential, particularly in regions like Europe, the Middle East, and Asia Pacific [20][21] Aftermarket Growth - Honeywell has outpaced the aftermarket growth through investments in retrofitted modifications, which account for about 10% of total revenue [23][24] - The company has a significant software engineering workforce (approximately 11,000 engineers) to enhance value-added offerings [25][26] Supply Chain Management - The supply chain is bifurcated into electronics and mechanical segments, with electronics fully recovered while mechanical faces ongoing constraints [28][29] - Honeywell has invested over $1 billion since 2021 to enhance supply chain capacity and resilience [30][31] Defense Sector Insights - 60% of Honeywell's business is commercial, while 40% is defense, with 75% of defense revenue coming from domestic sources [34][35] - The company is well-positioned to capitalize on increased defense spending, particularly in NATO and the Indo-Pacific regions [38][39] Mergers and Acquisitions - Recent acquisitions have integrated well, exceeding performance expectations, and M&A will be a critical part of Honeywell's growth strategy moving forward [47][48] - The company has a robust pipeline of potential acquisition targets [49][50] Backlog and Future Outlook - Honeywell Aerospace has an all-time high backlog of $39 billion and a book-to-bill ratio of 1.2, indicating strong future growth potential [51][52] - The company anticipates continued growth in air transport and defense sectors, despite normalization in the business aviation market [53] Advanced Air Mobility - Honeywell has established a dedicated business unit for advanced air mobility, focusing on integrating new technologies and securing positions across various platforms [55][56] - Certification of new products is expected, with significant adoption anticipated by the mid-2030s [60][61] This summary encapsulates the key points discussed during the Honeywell Aerospace FY Conference, highlighting the company's strategic direction, market dynamics, and future growth opportunities.

Summary of Honeywell (HON) FY Conference - May 28, 2025 Industry Overview - The conference focused on the **Advanced Air Mobility (AAM)** market, specifically the **eVTOL (electric Vertical Take-Off and Landing)** segment, which is expected to grow significantly in the coming years [1][3][10]. Key Points and Arguments 1. **Market Potential**: Honeywell estimates a **$31 billion** addressable market for AAM by **2030**, broken down into: - Air taxi: **$20 billion** - Middle mile cargo: **$10 billion** - Local light parcel: **$1 billion** [7]. 2. **Market Evolution**: The initial forecasts for commercial applications were overly optimistic. The focus has shifted towards **emergency services** and **Department of Defense (DoD)** special missions, indicating a pivot in vehicle applications [8][10]. 3. **Geographical Dynamics**: The Eastern Hemisphere is leading in rule-making and early AAM activities, which is expected to catalyze progress in Western markets. The U.S. is also prioritizing AAM as a strategic initiative [30][32]. 4. **Product Development**: Honeywell has developed the **Anthem** integrated cockpit, which is scalable and designed for future operations, including reduced crew scenarios. The first application is expected to be in eVTOL, targeting entry into service by **February 2030** [15][17]. 5. **Technological Integration**: Honeywell's offerings in AAM leverage existing aerospace technologies, with a focus on integrating systems to reduce size, weight, and power requirements. This integration is seen as a significant opportunity for Honeywell [40][41]. 6. **Investment Strategy**: Most technologies for AAM were developed as part of Honeywell's broader aerospace roadmap, with only a modest investment in unique AAM offerings. The company is focused on adapting existing technologies to meet AAM needs [26][28]. 7. **Revenue Generation**: The revenue ramp for AAM is expected to be uneven, with potential for unexpected missions to drive production. Honeywell remains optimistic about the end market despite the variability [44]. 8. **Public Acceptance**: The acceptance of eVTOL vehicles is seen as critical. Honeywell emphasizes the importance of making airspace conspicuous and learning from public feedback on existing technologies like autonomous vehicles and drone deliveries [46][48]. Additional Important Content - **Partnerships and Collaborations**: Honeywell is actively developing partnerships with various companies in the AAM space, with more announcements expected in the future. The company is selective in its collaborations to ensure resource allocation to high-potential projects [49]. - **Future Outlook**: Honeywell is excited about the potential applications of AAM technologies that have not yet been envisioned, similar to the early days of the Internet. The company anticipates significant innovations and economic opportunities as AAM technologies mature [52].