Honeywell: The Year In Review

by Trefis Team
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Honeywell International (NYSE: HON) had a pretty great year this time around. The company started the year off strong, and kept that momentum running throughout 2017. While stagnant growth at Aerospace hurt the company’s top line, business at other segments helped offset the losses without much of a problem. Honeywell’s results throughout the year were buoyed by strategic investments, greater operational efficiencies, and stronger demand in most key markets. In this respect, the company felt comfortable enough to raise its guidance figures twice in the year.

Despite this, however, the conglomerate’s continuous restructuring activities are yet to show any signs of overall stabilization in many of its major end markets. The upcoming earnings call could shed some more light on this matter.

Key Highlights From The Year:

  • Honeywell has always understood the need to acquire new companies in an effort to grow its already mighty business. In this respect, the company closed a few important deals this year – the most important of these being the deal with Nextnine. Nextnine is a private security management solutions provider for industrial cyber security. The acquisition helped Honeywell boost its limited cyber security portfolio with complementary products and services. Additionally, Nextnine’s portfolio greatly improved facilities at the Honeywell Connected Plant.
  • Earlier in Q1, the company announced that it has been selected to provide a wide range of process technology for the largest petrochemicals project in China. As part of the deal, Honeywell UOP was to offer a wide range of technologies to the project in the form of licensing, designing, key equipment, and state-of-the-art catalysts. Additionally, the Process Solutions segment provided the process controls and automation systems. This deal is expected to greatly benefit the company going forward.
  • In 2017, the Safety and Productivity Solutions (SPS) business became the company’s top performing segment thanks to the acquisition of Intelligrated – a leading supply chain company. It drove more than 30% of the growth at SPS. Further, orders and backlog at the business grew at a modest pace throughout 2017. We can expect this momentum to continue through 2018 as well.
  • In December, Honeywell acquired 25% ownership interest in Flux Information Technology, a leading provider of warehouse management and related supply chain software in China. Additionally, the company also decided to form a new joint venture company with Flux’s founder in an effort to better serve customers outside China. Honeywell will hold a 75 percent stake in this new joint venture. The company is expected to operate primarily in the Asia Pacific region. The partnership is expected to enhance Honeywell’s Connected Supply Chain offerings and advances its software-industrial strategy. We can expect to learn more about this in the upcoming earnings call.

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