Honeywell International Inc. · NASDAQ:HON
Honeywell International — Q1 2025 Earnings Presentation
29 slides from Honeywell International's earnings presentation, Apr 29, 2025
Slide 1: First Quarter 2025 Earnings Release
FIRST QUARTER 2025 EARNINGS RELEASE APRIL 29, 2025
Slide 2: Forward Looking Statements; Non-GAAP Financial Measures
FORWARD LOOKING STATEMENTS We describe many of the trends and other factors that drive our business and future results in this presentation. Such discussions contain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act), in
Slide 3: Key Messages
KEY MESSAGES • Exceeded high end of guided sales, margin, and adjusted EPS ranges in 1Q; improved cash performance • Maintaining pragmatic approach to 2025 outlook; raising 2025 EPS guidance while incorporating expected net impact of tariffs, mitigation actions, and global economic uncertainty • Tak
Slide 4: Leadership Announcements
LEADERSHIP ANNOUNCEMENTS SU PING LU ANNE MADDEN STEPHEN WILLIAMSON SVP, GENERAL COUNSEL AND SVP, PORTFOLIO TRANSFORMATION INDEPENDENT DIRECTOR AND AUDIT CORPORATE SECRETARY AND SENIOR ADVISOR COMMITTEE MEMBER • Newly appointed Officer of the Company • Selected to guide Honeywell through • SVP and CF
Slide 5: Three Industry-Leading Public Companies
THREE INDUSTRY-LEADING PUBLIC COMPANIES HONEYWELL HONEYWELL SOLSTICE ADVANCED AUTOMATION AEROSPACE MATERIALS Pure play automation leader Premier technology and systems Sustainability-focused specialty solving the world’s most complex provider for all forms of aircraft; to chemicals and materials pur
Slide 6: Portfolio Transformation
PORTFOLIO TRANSFORMATION 2023 2024 2025 - 2026+ • Strategic alignment around three • Initiation of comprehensive • Continued strategy execution and megatrends internal business and portfolio preparation to create three Strategy and • Business re-segmentation review including transformational indepen
Slide 7: Well-Positioned for Global Trade Uncertainty
WELL-POSITIONED FOR GLOBAL TRADE UNCERTAINTY UNITED STATES EUROPE MITIGATION EFFORTS ~45% of total sales1 ~20% of total sales1 ~$500M 2025 exposure, based on current tariffs, which we plan to fully offset with: • Targeted pricing actions by product line • Direct material productivity; value engineer
Slide 8: 1Q 2025 Results
1Q 2025 RESULTS 1Q 2025 1Q 2025 1Q 2025 HIGHLIGHTS ACTUAL GUIDANCE ADJUSTED • Exceeded upper end of organic sales growth, segment margin EARNINGS $2.51 $2.15 - $2.25 expansion, and adjusted earnings per share guidance PER SHARE* • Organic sales growth of 4% driven by double-digit growth in commercia
Slide 9: 2Q and FY 2025 Outlook
2Q AND FY 2025 OUTLOOK 2Q GUIDANCE FY GUIDANCE SALES SEGMENT MARGIN* SALES SEGMENT MARGIN* $9.8B - $10.1B 22.8% - 23.2% $39.6B - $40.5B 23.2% - 23.5% Up 2% - 5% Organically* Up 60 - 90 bps Up 1% - 4% Organically* Down (20) - Up 20 bps Up 1% - 4% ex. BBD1 Down (10) – Up 20 bps ex. BBD1 NET BELOW THE
Slide 10: FY 2025 Segment Guidance
FY 2025 SEGMENT GUIDANCE ORGANIC GROWTH RESULTS AND GUIDANCE 2025 COMMENTARY ($M) 1Q 2025 2Q 2025 FY 2025 • Commercial OE sales growth on shipset output ramp 9% MSD - HSD HSD • Continued momentum in commercial aftermarket, defense and space AT MSD - HSD ex. BBD1 • Margin of ~26% as volume leverage i
Slide 11: 2025 Earnings Per Share Bridge
2025 EARNINGS PER SHARE BRIDGE Guidance Ranges: $0.03 - $0.23 $0.32 - $0.34 ($0.56) - ($0.48) 1Q Beat: +$0.09 vs. 4Q24 Earnings Walk: 2Q - 4Q Demand Contingency: -$0.18 -$0.09 -$0.02 +$0.07 +$0.09 +$0.05 ~$0.33 Midpoint ~($0.07) ~($0.52) ~($0.05) ~$0.13 Midpoint Midpoint Up 3% - 6% Adjusted $0.45 ~$
Slide 12: Summary
SUMMARY • Strong start to the year across all guided metrics; growth in orders and backlog • Raising midpoint of adjusted EPS guidance, net of expected impact of tariffs, mitigation actions, and global demand uncertainty • While geopolitical volatility clouds demand picture, containment efforts to t
Slide 13: Appendix
Appendix 1Q 2025 Earnings – April 29, 2025 12
Slide 14: 1Q 2025 Financial Summary
1Q 2025 FINANCIAL SUMMARY SALES SEGMENT MARGIN* ADJUSTED EPS* FREE CASH FLOW* Up 4% Organic* Flat bps Up 7% Up 61% $2.51 $9.8B 23.0% 23.0% $0.3B $0.2B $9.1B $2.34 1Q24 1Q25 1Q24 1Q25 1Q24 1Q25 1Q24 1Q25 + Double-digit organic growth in + Margin expansion in ESS and BA + Higher segment profit + Deplo
Slide 15: 1Q 2025 Segment Results
1Q 2025 SEGMENT RESULTS SEGMENT MARGIN SALES CHANGE (BPS) COMMENTARY ($M) • Mid-teens organic growth in commercial aftermarket led by air transport; fifth consecutive quarter of double-digit organic $4,172 26.3% sales growth in defense and space AT Up 9% Organic Down (190) bps • Robust orders growth
Slide 16: 1Q 2025 Sales Growth
1Q 2025 SALES GROWTH 1Q Reported 1Q Organic AEROSPACE TECHNOLOGIES 14% 9% Commercial Aviation Original Equipment (8%) (7%) Commercial Aviation Aftermarket 14% 15% Defense and Space 23% 10% INDUSTRIAL AUTOMATION (4%) (2%) Process Solutions (2%) 0% Productivity Solutions and Services (16%) (15%) Sensi
Slide 17: 1Q25 Earnings Per Share Bridge
1Q25 EARNINGS PER SHARE BRIDGE $0.12 ($0.02) ($0.03) $0.02 ($0.16) ($0.02) Up 7% YoY $0.10 - Higher - 21.5% vs. + 652M vs. interest 657M expense 21.0% $2.51 ($0.09) + Productivity ($0.02) + Pricing ($0.02) $2.34 - Inflation $2.22 1Q24 Adjusted Segment M&A FX Below the Line Adjusted Share 1Q25 Adjust
Slide 18: Additional 2025 Inputs
ADDITIONAL 2025 INPUTS 1Q25 2Q25E 2025E COMMENTARY Pension / $159M ~$100M ~$550M • Headwind from one-time item shifted from 1Q to 2Q OPEB Repositioning ($7M) ($20M - $60M) ($125M - $225M) • Lower 1Q spend driving modest reduction versus prior guide Other Below the ($305M) ($300M - $310M) ($1,350M -
Slide 19: 2025 Guidance Progression
2025 GUIDANCE PROGRESSION ORIGINAL GUIDE CURRENT GUIDE (From 4Q24 Earnings Call) (From 1Q25 Earnings Call) SALES $39.6B - $40.6B $39.6B - $40.5B Organic Growth* Up 2% - 5% (Up 1% - 4% ex. BBD1) Up 2% - 5% (Up 1% - 4% ex. BBD1) PPE Sale Timing • Current 2025 guide now SEGMENT MARGIN* 23.2% - 23.6% 23
Slide 20: 2025 Free Cash Flow Bridge
2025 FREE CASH FLOW BRIDGE ~$0.3B ~($0.1B) Up 10% - 18% $0.5B ~($0.1B) ($0.2B) - Flat range Down (2%) - Up 5% ($0.2B) – Flat range $0.2B - $0.4B range ex. BBD1 $5.5B $5.4B - $4.9B $5.8B FY24 Exclusion of FY24 Ex. BBD1 Net Income Working Capital Capital 2025 Guidance BBD Agreement Growth / Other Spen
Slide 21: 2025 Sales Bridge
2025 SALES BRIDGE vs. 4Q24 Earnings Walk: +$0.2B -$0.2B ~$1.1B ~($0.7B) Up 2% - 5% ~$1.0B ~($0.2B) Organic Up 1% - 4% ex. BBD1 ~$0.4B $39.6B - $38.9B $40.5B $38.5B FY24 Exclusion of FY24 Sales Organic Foreign Acquisitions PPE Early FY25 Sales BBD Agreement Ex. BBD 1 Growth Exchange May Exit Guidance
Slide 22: Non-GAAP Financial Measures
NON-GAAP FINANCIAL MEASURES The following information provides definitions and reconciliations of certain non-GAAP financial measures presented in this presentation to which this reconciliation is attached to the most directly comparable financial measures calculated and presented in accordance with
Slide 23: Reconciliation of Operating Income to Segment Profit
RECONCILIATION OF OPERATING INCOME TO SEGMENT PROFIT AND CALCULATION OF OPERATING INCOME AND SEGMENT PROFIT MARGINS ($M) 1Q24 2Q24 1Q25 2024 Operating income $ 1,860 $ 1,978 $ 1,970 $ 7,441 Stock compensation expense1 53 55 61 194 Repositioning, Other2,3 92 58 62 292 Pension and other postretirement
Slide 24: Reconciliation of Organic Sales Percent Change
RECONCILIATION OF ORGANIC SALES PERCENT CHANGE 1Q25 Honeywell Reported sales percent change 8% Less: Foreign currency translation (1)% Less: Acquisitions, divestitures and other, net 5% Organic sales percent change 4% Aerospace Technologies Reported sales percent change 14% Less: Foreign currency tr
Slide 25: Reconciliation of EPS to Adjusted EPS
RECONCILIATION OF EPS TO ADJUSTED EPS 1Q24 2Q24 1Q25 FY2024 2Q25E 2025E Earnings per share of common stock - diluted1 $ 2.23 $ 2.36 $ 2.22 $ 8.71 $2.42 - $2.52 $9.48 - $9.78 Pension mark-to-market expense2 — — 0.02 0.14 No Forecast No Forecast Amortization of acquisition-related intangibles3 0.08 0.
Slide 26: Reconciliation of Effective Tax Rate to Adjusted Effective Tax Rate
RECONCILIATION OF EFFECTIVE TAX RATE TO ADJUSTED EFFECTIVE TAX RATE ($M) 1Q24 1Q25 Income before taxes $ 1,871 $ 1,884 Pension mark-to-market expense — 14 Amortization of acquisition-related intangibles 70 136 Acquisition-related costs 5 8 Divestiture-related costs — 48 Russian-related charges 17 —
Slide 27: Reconciliation of Operating Cash to Free Cash Flow
RECONCILIATION OF CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW ($M) 1Q24 1Q25 Cash provided by operating activities $ 448 $ 597 Capital expenditures (233) (251) Free cash flow $ 215 $ 346 We define free cash flow as cash provided by operating activities less cash for capital expenditures.
Slide 28: Reconciliation of Expected Operating Cash to Expected Free Cash Flow
RECONCILIATION OF EXPECTED CASH PROVIDED BY OPERATING ACTIVITIES TO EXPECTED FREE CASH FLOW 2025E($B) Cash provided by operating activities ~$6.7 - $7.1 Capital expenditures ~(1.3) Free cash flow ~$5.4 - $5.8 We define free cash flow as cash provided by operating activities less cash for capital exp
Slide 29: 1Q 2025 Earnings – April 29, 2025
1Q 2025 Earnings – April 29, 2025 28
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