Honeywell International (HON) 18th Annual Global Transportation & Industrials Conference summary

Business performance and growth drivers

• Achieved consecutive quarters of 8% growth, driven by strong customer relationships, targeted R&D investment, and new product uptake.

• R&D investment increased by 50 basis points as a percentage of sales in Q1, fueling growth and margin expansion.

• Growth is concentrated in data centers, hospitality, and healthcare globally, with regional focus on sectors like transportation and clean tech manufacturing.

• Data center vertical is growing at strong double digits, supported by advanced fire detection and new PLC offerings.

• Access Solutions business, after one year of integration, is performing ahead of plan and expanding globally.

Strategic initiatives and innovation

• Continued R&D investment, including AI tools for software developers, has led to double-digit productivity gains.

• Focus on connected and software offerings enables decoupling from traditional investment cycles, unlocking new ROI opportunities for customers.

• Vitality rate is around 25%, a few points above historical levels, supporting margin expansion through connected and software solutions.

• Co-creation with customers and system integrators accelerates solution development and implementation, reducing deployment time from days to hours.

• Forge software platform is scaling through channel partners, with connected enterprise business reaching $2 billion.

Market dynamics and outlook

• Guidance reflects a pragmatic approach, balancing strong internal momentum with external uncertainties like tariffs.

• Larger, long-cycle projects such as data centers and infrastructure remain resilient, while smaller projects may accelerate or pause based on tariff developments.

• U.S. mega projects pipeline supports mid to high single-digit growth targets for Building Automation.

• Access Solutions is being globalized, with minimal regional barriers, and is expected to contribute positively as it becomes organic in the second half of the year.

• Margin expansion is driven by a mix of execution (investment, pricing, productivity) and strategic shift toward higher-value, software-connected solutions.