Honeywell International Inc. · NASDAQ:HON
Honeywell International — Mad Money Briefing (October 2016)
25 slides from Honeywell International's conference presentation, Oct 13, 2016
Slide 1: Mad Money Briefing October 13, 2016
MAD MONEY BRIEFING October 13, 2016
Slide 2: Forward Looking Statements
Mad Money Briefing October 13, 2016 1 Forward Looking Statements This report contains “forward - looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of fact, that address activities, events or developments that we or our
Slide 3: Great Performance In Tough Macro Environment In 2016
Mad Money Briefing October 13, 2016 Great Performance In Tough Macro Environment In 2016 2 2% - 3% 8% - 9% Reported Sales EPS EPS , V% Exclude Any Pension Mark - to - Market Adjustment And Contemplated Debt Refinancing Charges • Continued Slow Growth Environment • HON Oil & Gas Businesses Bottomed 3
Slide 4: Sticking To 2016 Earnings Guidance
Mad Money Briefing October 13, 2016 Sticking To 2016 Earnings Guidance 3 2014 2015 LTM July Current ~ 1% Core Organic ~$39.5B Current Sales Guidance Represents Midpoint Of Reported Sales Growth Guidance ~$40.3B (1%) - (2%) Core Organic Sales Guidance $ 6.60 - $ 6.70 $ 6.60 - $ 6.64 July Current EPS
Slide 5: 3Q Oil & Gas Bottom … 2017 Inflections Intact
Mad Money Briefing October 13, 2016 3Q Oil & Gas Bottom … 2017 Inflections Intact 4 • New Product Introduction, Connected Offerings, Installed Base Expansion • Slowing Business Jets Production Rates, OEM Incentives Headwind • Lap Market Headwinds, UOP Backlog Improving (+15%) • Domestic Space Slowin
Slide 6: Delivering On A Long-Term Basis
Mad Money Briefing October 13, 2016 Delivering On A Long - Term Basis 5 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016E EPS Growth (Indexed To 2007) HON Peer Average 197 134 100 Peer Average Consists Of GE, UTX, MMM, ITW, EMR, COL; EPS Growth Based On Each Company’s Presentation Of Adjusted EPS E
Slide 7: Strong Visibility To 4Q16
Mad Money Briefing October 13, 2016 3Q16E EPS UOP Catalysts; Process Solutions Short-Cycle Productivity Solutions Growth Restructuring Benefits Net M&A Below-The-Line, Other, Tax 4Q16E ~$1.67 $0.08 - $0.09 $0.02 - $0.03 $0.03 - $0.04 ~($0.02) ($0.03) - ($0.04) $1.74 - $1.78 Strong Visibility To 4Q16
Slide 8: Long Cycle Improving For 2017
Mad Money Briefing October 13, 2016 Long Cycle Improving For 2017 7 ~$15.5B ~$ [VAL UE] B Long Cycle Backlog Growth 3Q15 3Q16 Short/Long Cycle Mix Long Cycle 40% Short Cycle 60% • 2 % Backlog Growth Driven Primarily By UOP, D&S • Diversity Of Opportunity Matters • Massive Installed Base In Aerospace
Slide 9: Favorable Set Up In 2017
Mad Money Briefing October 13, 2016 Favorable Set Up In 2017 8 2016 EPS Guidance Midpoint Targeting Double - Digit EPS Growth 2016 Divestitures Sales Inflections Other Sales Growth Operational Performance Restructuring Benefits F/X Hedges 2017 2016 EPS Guidance Midpoint Targeting Double - Digit EPS
Slide 10: Substantial Capital Put To Work For Shareowners
Mad Money Briefing October 13, 2016 Substantial Capital Put To Work For Shareowners 9 $1.5B $0.9B $4M $1.7B $1.9B $5.2B ~ [VALUE] ~$1.9B ~$2.6B Dividends Share Repurchases M&A 2014 2015 2016E 2014 2015 3Q16E YTD 2015 3Q16E YTD 2014 • Attractive Returns From Nine Acquisitions Over Past 18 Months • Co
Slide 11: Improving Growth Profile Through Portfolio Management
Mad Money Briefing October 13, 2016 ~$11B, ~5% CAGR ~$20B, 8% - 10% CAGR 8% CAGR New $7B+ Connectivity Market $4B, 10% CAGR Improving Growth Profile Through Portfolio Management 10 • Advanced Gas Heating, Controls And Metering • Space - Based Communications Components and Related Subsystems • On - B
Slide 12: Investing Significantly To Grow The Business
Mad Money Briefing October 13, 2016 [VALUE ] B [VALUE ] B [VALUE ] B 164% 159% 158% 2014 2015 2016E CapEx Reinvestment Ratio High ROI Capital Expenditures R&D >7% Of Sales Investing Significantly To Grow The Business R&D Includes Customer - Funded R&D [VALUE ] B [VALUE ] B [VALUE ] B 7.3% 7.4% 7.5%
Slide 13: Building An Industry-Leading Aerospace Installed Base
Mad Money Briefing October 13, 2016 Building An Industry - Leading Aerospace Installed Base 12 OEM Incentive Investments (All Expensed) • Large Wins On The Right Platforms Accelerate Growth • 17 New Aircraft Launching; 200 + New Products • Massive Installed Base • Conservative Accounting For Incenti
Slide 14: A Strong Portfolio Aligned To Favorable Macro Trends
Mad Money Briefing October 13, 2016 Flight Hours Growing, Demand For Connectivity Half Our 23,000 Engineers Developing Software Today Differentiated HGR Presence And Strategies Nearly 50% Of HON Portfolio Dedicated To Energy Solutions Investing For Growth Through Smart Capital Investments Aerospace
Slide 15: Leading The Connected Aircraft Evolution
Mad Money Briefing October 13, 2016 Leading The Connected Aircraft Evolution 14 Fast Network Hardware | Equipment Software Expertise Content Delivery Services | App Store Exclusive Inmarsat Network | Airtime Offering JetWave Cockpit, Mechanical Leadership Easier, Faster Digital Delivery Of Upgrades
Slide 16: Golden Age Of Turbos
Mad Money Briefing October 13, 2016 Golden Age Of Turbos 15 Regulations Becoming More Stringent 2000 2010 2020 2030 2040 2050 33% 2015 ~70% 47% 2020 Recent Upgrades Real Driving Emissions From 2017 Small Engines Incentives Euro 5 † From 2017 Commercial Vehicles CO 2 Target Redefinition Euro 6 † From
Slide 17: Growth In Today's Connected World (IoT)
Mad Money Briefing October 13, 2016 Growth In Today’s Connected World (IoT) 16 ∂ BUILDINGS + CONNECTED 10M GLOBAL INSTALLED BASE VEHICLES + CONNECTED 100M GLOBAL INSTALLED BASE WORKERS + CONNECTED 550M GLOBAL PPE USERS HOMES + CONNECTED 150M GLOBAL INSTALLED BASE PLANTS + CONNECTED 10K+ GLOBAL INSTA
Slide 18: Half Our Engineers Developing Software Today
Mad Money Briefing October 13, 2016 Half Our Engineers Developing Software Today 17 Engineers Software Engineers Total Engineers Why Successful? • CMMI Level 5 Across Company • 77% Of HOS Gold Breakthrough Goals • Simulation, Product Enablement, Business Levels 22,800 Chemical Electrical Mechanical
Slide 19: High Growth Regions Census and GDP Growth
Mad Money Briefing October 13, 2016 1.7% Growth 4.2% Growth HGR Developed Market ~18,000 ~58,000 2003 2016 World GDP Honeywell Census High Growth Regions Penetration 18 59% Of 2016 World GDP 41% Of 2016 World GDP Source: IHS Global Insight Growth Rate Is 20 Year CAGR From 2015 To 2035 ~220% Growth I
Slide 20: PMT Sales Growth From Smart Capital Investments
Mad Money Briefing October 13, 2016 PMT Sales Growth From Smart Capital Investments 19 New Capacity Additions Deliver High ROI Revenue From Growth Capital Projects • Capital Investments Delivering 30% - 40% Returns • UOP Catalyst Capacity Expansion Supported By Large Installed Base Driving Robust De
Slide 21: Energy Efficiency And Clean Energy Generation
Mad Money Briefing October 13, 2016 Energy Efficiency And Clean Energy Generation By immediately and comprehensively adopting existing Honeywell products and solutions, the U.S. could reduce energy consumption 20 to 25% . Biofuels Air Traffic Modernization Low - Global - Warming Refrigerants Fuel -
Slide 22: HON Business Model
Mad Money Briefing October 13, 2016 HON Business Model 21 • 5 Initiatives / 12 Behaviors • Management Resource Review - CEO Interviews Top 200 Roles • Customer Focused • Trick Is In The Doing - The Machinery Needs To Work - Go Slow To Go Fast - Achieve Two Seemingly Conflicting Things • Constantly E
Slide 23: Honeywell Is A Bargain!
Mad Money Briefing October 13, 2016 22 Honeywell Is A Bargain! 0 5 10 15 20 25 MMM ITW GE EMR XLI HON COL UTX 2016 P/E Ratio 118% 67% 81% 69% 2011 - 2015 TSR HON Peer Average S&P XLI Peer Average Consists Of GE, UTX, MMM, ITW, EMR, COL EPS Excludes Any Pension Mark - to - Market Adjustment And Conte
Slide 24: Appendix
Mad Money Briefing October 13, 2016 23 Appendix
Slide 25: Reconciliation Of EPS To EPS, Excluding Pension Mark-To-Market Adjustment
Mad Money Briefing October 13, 2016 24 Reconciliation Of EPS To EPS, Excluding Pension Mark - To - Market Adjustment 2007 (1) 2008 (2) 2009 (3) 2010 (4) 2011 (5) 2012 (6) 2013 (7) 2014 (8) 2015 (9) EPS $3.35 $1.08 $2.05 $2.59 $2.61 $3.69 $4.92 $5.33 $6.04 Pension Mark-to-Market Adjustment 0.01 2.74
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