Honeywell International Inc. (HON) Presents at Bank of America Global Industrials Conference (Transcript)

Summary of Honeywell International Inc. Conference Call Company Overview - Company: Honeywell International Inc. (NASDAQ: HON) - Sector: Aerospace - Participants: - Mike Madsen - President and CEO, Honeywell Aerospace - Sean Meakim - IR - Andrew Obin - Bank of America Key Points Industry Outlook - The aerospace industry is experiencing strong growth, particularly in Original Equipment Manufacturer (OEM) and aftermarket segments for both Air Transport and Business Aviation [4][6] - Defense sector is stabilizing with clear priorities, showing low to mid-single-digit growth [4][6] - Honeywell has seen a significant increase in business wins in advanced air mobility, growing from $3.5 billion to$7 billion in one year [5] Financial Performance - Honeywell's backlog has grown significantly, with $18 billion in business wins over the last two years [11] - Output is up 15$1.1 billion for the current year, with a projected 10% CAGR [37] Market Segments - Air transport is seeing double-digit growth, while business aviation is expected to grow at a mid-single-digit rate [6][16] - Wide-body flight hours are recovering faster than narrow-body, with expectations to return to 2019 levels by late 2024 [14] - Business aviation aftermarket is stabilizing at a low single-digit growth rate, particularly strong in fractional and corporate flight departments [17] Supply Chain and Labor - The supply chain remains constrained, primarily due to labor shortages rather than capital capacity [22] - Honeywell is focusing on dual sourcing and selective automation to mitigate supply chain challenges [22] Research and Development - Honeywell is investing in electrification and advanced technologies, including hybrid electric power systems and sustainable aviation fuel [7][52] - The company plans to maintain R&D spending at 5% to 8% of revenue, focusing on efficiency and innovation [47] Defense and Space - The latest President's budget reflects a shift in defense priorities towards the Asia Pacific region and modernization of military capabilities [29][30] - Honeywell is well-positioned to benefit from increased demand for navigation products and systems related to defense [31] Urban Air Mobility - Honeywell is actively involved in urban air mobility, focusing on reducing crew requirements and enhancing operational efficiency [55][56] - The timeline for commercialization of urban air mobility products has shifted to 2025-2026, with regulatory developments progressing positively [62] Conclusion - Honeywell is optimistic about its growth prospects in 2023, with strong demand across various segments and a solid supply chain recovery [69] - The company is well-positioned to capitalize on emerging trends in aerospace, including sustainability and advanced air mobility technologies [69]