01—Abstract
Summary
Summary of the 10-K filed February 16, 2024. Cited figures are marked; the original filing is the authoritative source.
Honeywell International Inc. reported strong performance in 2023, driven by its Honeywell Accelerator operating model and strategic alignment with key megatrends: automation, the future of aviation, and the energy transition.
The company achieved sales growth of 3% to $36.7 billiona, with notable strength in Commercial Aviation, Defense and Space, and Process Solutions. Capital deployment remained robust, with $8.3 billion allocated to capital expenditures, dividends, and share repurchases, reflecting a continued commitment to shareholder returns through a 5% dividend increase and opportunistic share buybacks. Looking ahead, Honeywell maintains a solid foundation with a backlog of $31.8 billion, positioning it well for continued growth.
The company announced a significant acquisition of Carrier Global Corporation's Global Access Solutions business, further bolstering its portfolio. Honeywell is also preparing for a business segment realignment in early 2024 to better align with its strategic focus areas, creating new segments like Industrial Automation and Energy and Sustainability Solutions. Despite navigating macroeconomic challenges and supply chain constraints, Honeywell's mitigation strategies and diversified business segments demonstrate resilience.
02—Key points
Key Highlights
- Achieved 3% sales growth in 2023, reaching $36.7 billion, primarily driven by strong performance in Aerospace and Process Solutions.
- Announced a significant acquisition of Carrier Global Corporation's Global Access Solutions business for $5.0 billion.
- Maintained a robust backlog of $31.8 billion at the end of 2023, indicating strong future demand.
- Deployed $8.3 billion in capital in 2023 towards capital expenditures, dividends, and acquisitions.
- Increased the quarterly dividend by 5% and intends to continue returning capital to shareholders.
- Announced a business segment realignment, effective Q1 2024, to better align with strategic megatrends.
- Successfully navigated supply chain constraints and inflation through proactive mitigation strategies.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2023, Honeywell International kept $0.17.
- Revenue$33.01B100.0%
- Cost of revenue−$20.64B62.5%
- Gross profit$12.37B37.5%
- Operating costs−$4.81B14.6%
- Operating income$7.56B22.9%
- Interest, other & tax−$1.91B5.8%
- Net income$5.66B17.1%
04—Financials
Financial Highlights
Figures from 10-KFY2023filed February 16, 2024Financial Statements
FY2023 against FY2022
| Line item | FY2023FY2022 | Change |
|---|---|---|
| Revenue | $33.01B$35.47B | −6.9% |
| Cost of Revenue | $20.64B$22.35B | −7.7% |
| Gross Profit | $12.37B$13.12B | −5.7% |
| R&D Expenses | $1.38B$1.48B | −7.0% |
| SG&A Expenses | $4.89B$5.21B | −6.3% |
| Operating Income | $7.56B$8.02B | −5.7% |
| Net Income | $5.66B$4.97B | +13.9% |
| EPS (Basic) | $8.53$7.33 | +16.4% |
| EPS (Diluted) | $8.47$7.27 | +16.5% |
| Shares Outstanding (Basic) | 663.00M677.10M | −2.1% |
| Shares Outstanding (Diluted) | 668.20M683.10M | −2.2% |
05—Questions
Frequently Asked Questions
What was Honeywell's overall financial performance in 2023?
In 2023, Honeywell reported a 3% increase in sales, reaching $36.7 billion. The company also saw growth in its segment profits and continued to deploy capital effectively through investments, dividends, and share repurchases, demonstrating a strong financial performance despite macroeconomic challenges.
What are Honeywell's key strategic priorities and how are they reflected in this filing?
Honeywell's strategic priorities are centered around three megatrends: automation, the future of aviation, and the energy transition, all underpinned by digitization. This is reflected in their business segment structure, acquisition strategy (e.g., Carrier Global's Global Access Solutions business), and their ongoing investment in Honeywell Forge solutions. The upcoming business segment realignment further underscores this strategic focus.
How is Honeywell managing supply chain disruptions and inflationary pressures?
Honeywell employs a combination of short-term and long-term mitigation strategies. These include implementing pricing actions, engaging in longer-term planning for constrained materials, developing new suppliers, utilizing material supply tracking tools, and directly engaging with key suppliers. They also stated that these strategies have successfully mitigated their exposure to these conditions.
What significant capital allocation activities did Honeywell undertake in 2023?
In 2023, Honeywell deployed $8.3 billion across various capital allocation activities. This included $1.039 billion in capital expenditures, $3.715 billion in share repurchases, $2.855 billion in cash dividends paid, and $0.718 billion for acquisitions (net of cash acquired). They also announced the planned acquisition of Carrier Global Corporation's Global Access Solutions business.
06—Continue