Honeywell at 18th Annual Conference: Strategic Growth and Challenges

On Tuesday, 20 May 2025, Honeywell International Inc. (NASDAQ:HON) participated in the 18th Annual Global Transportation & Industrials Conference. The discussion, led by Wolfe Research analyst Nigel Coe and Honeywell Building Automation CEO Bill Hamoud, provided insights into the company’s growth strategies and challenges, highlighting both robust performance and potential hurdles such as tariffs.

Key Takeaways

• Honeywell Building Automation reported 8% organic growth in consecutive quarters.
• R&D investments increased by 50 basis points as a percentage of sales.
• Potential Q2 growth deceleration due to tariff uncertainties.
• Focus on connected solutions, particularly the Forge platform, for margin expansion.
• Emphasis on regional independence to mitigate tariff impacts.

Financial Results

• Honeywell Building Automation experienced 8% organic growth in the last two quarters.
• R&D investments increased by 50 basis points as a percentage of sales in Q1.
• The long-term margin target is set at 29%.
• The Connected Enterprise business is valued at $2 billion.
• Vitality sits at approximately 25%, slightly ahead of historical levels.

Operational Updates

• Growth verticals include data centers, hospitality, and healthcare, with data center growth in strong double digits.
• The Access Solutions business, including the Lennell S2 solution, is slightly ahead financially.
• AI tools have led to a double-digit increase in software engineer productivity.
• More than 80% of major regions operate locally, providing an advantage against tariffs.
• Significant R&D investment has shifted towards Access Solutions.

Future Outlook

• Aiming for mid to high single-digit growth.
• Anticipating growth in security due to demand for cloud-native solutions.
• Plans to enhance value for customers through software-connected solutions that drive higher margins.

Q&A Highlights

• Tariff uncertainties are being managed by increasing regional independence.
• Co-creating solutions with customers to ensure ease of implementation.
• Forge solutions are now distributed through channel partners.
• Emphasis on the scalability of access solutions.

Readers are encouraged to refer to the full transcript for a more detailed analysis of Honeywell’s strategic direction and financial performance.

Full transcript - 18th Annual Global Transportation & Industrials Conference:

Nigel Coe, Analyst, Wolfe Research: Great. I think we’ll get started. We’re running a little late here, but just for those on the webcast, thanks for joining the Wolf Global Industrials and Transfers Conference. My name is Nigel Coe. I cover the multi industry sector here at Wolfe Research.

I also cover Honeywell and Honeywell is the next company on stage. And it’s my pleasure to welcome Bill Hamoud, who is the President and CEO of Build Nordvation. And also in the crowd, we’ve got Josh Jonegan. If you’ve got any CFO of the segments who have any naughty questions on finance, we’ve got the CFO and the crowd as well. So Bill, do want to make some opening remarks and then we’ll get into Q and A?

Bill Hamoud, President and CEO, Build Nordvation (Honeywell Building Automation): Thank you. Yes. Sure. Thanks, Nigel. Good to see everybody here.

Just quick opening remarks. Strong business momentum. We’ve had back to back quarters with 8% growth. Really comes down to a couple of things. It’s the strength of our customer relationships, especially as you think about closest to the customers in our regions as well as closest to our customers and select growth verticals, coupled with our R and D investment and the strong uptake in our new product offerings.

Obviously, this R and D investment will continue, specifically as we think about the investments we are making in the area of connected and software offerings, something that will play quite nicely to our business model, which is 15% projects, 25% services and 60% products. We see further upside that this will create as well on our margin expansion journey. And lastly, with a couple of weeks away from the celebration of the full year of Access Solutions business being part of Honeywell Building Automation. And we’re quite pleased with the first year. Everything is coming according to plan, financial and otherwise, in fact, slightly ahead.

And we still see a lot of upside in that business as we look at our strategy for the next few years.

Nigel Coe, Analyst, Wolfe Research: Great. So obviously, Wimal, your boss, is talking about reinvestments, raising R and D, improving organic growth. And right on Q, your organic growth has been 8% for the last two quarters. So you clearly have the pack. Maybe just talk about what’s driving the higher growth that we’ve seen in the last couple of quarters.

Bill Hamoud, President and CEO, Build Nordvation (Honeywell Building Automation): Yes. You’re definitely seeing the impact from the R and D investment. And across Honeywell in Q1, we’ve increased our investments by 50 bps as a percent of sales, and certainly, Building Automation is a part of that. So that uptake on the R and D investment and on the new launches, new product launches is definitely a big part of that growth algorithm as well as with continued defined focus on the growth verticals. It takes the same amount of effort to win with a customer who’s not growing as it does with the one who’s growing.

So as we get smarter about where do we see our growth globally as well within specific regions, that plays out to our growth algorithm.

Nigel Coe, Analyst, Wolfe Research: And then when we double click into that 8%, Solutions have been growing double digits for two or three quarters now. And Products has gone from, I think, flat to negative to now mid single digits. So maybe talk about Solutions. What’s driving that outsized growth, particularly outsized growth in Solutions? Because that’s a business over time has been quite lumpy.

Bill Hamoud, President and CEO, Build Nordvation (Honeywell Building Automation): Yes. There’s two elements for Solutions. Within that 40% that makes up our Solutions business, 25% of that 25% is the Services, 15% is the Projects. On the Projects sides, delivering consistent growth has to do with anticipating where the growth buck is going and making sure that we go there. And this is all about where do we see which verticals and which regions, where do we see that investment happening and making sure that we do it.

One of the advantages we have in building automation is that there’s not really a country in which we operate in which we cannot scale because we’re truly a global company. So if we anticipate growth somewhere, we’re able to scale and make sure we’re ready for that growth. On the services side, it’s all about ensuring that the value we’re delivering and the way we deliver that value, that strong customer relationship translates into strong project to service conversion, and we’re quite pleased on what we’re seeing there as well as our software solutions to where now you’re able to decouple ourselves from the natural investment cycles. Investment cycles are either building a new building or they have a refurbishment plan coming up. But when we talk about decoupled growth, now we are able to create on the back of our connected and software offerings an opportunity to go to the customer and say, you can do more with your asset base or you can run it more effectively or at lower cost by implementing the software solution.

So now it’s no longer tied to that natural investment cycle, and the customer can create and justify an ROI on its own.

Nigel Coe, Analyst, Wolfe Research: Okay. Now you talked about the growth verticals, geographies and maybe some of the customer verticals. Maybe just make a bit more explicit in terms of where you see the growth Globally,

Bill Hamoud, President and CEO, Build Nordvation (Honeywell Building Automation): there’s three verticals where we see Catacross all of our regions as growth verticals: data center, no surprise hospitality, we see as a very growth very strong growth vertical for us as well as Healthcare. And then within our regions, our regional teams will select based on where the investments are in the specific regions based on what they see. For example, no surprise in places like The Middle East, strong investment in transportation, in airports and stadiums. So our teams there focus on that. In The U.

S, you see strong investment around clean tech manufacturing, whether it’s battery plants or semiconductor. So the combination of those three global growth verticals along with specific ones that are called out by regional teams make up our growth equation.

Nigel Coe, Analyst, Wolfe Research: Data center is obviously a very probably the highest growth vertical right now on the planet. Maybe just talk about your exposure to the data center, where you play, what kind of growth rate you’re seeing? And is that impacting the growth you’re seeing overall?

Bill Hamoud, President and CEO, Build Nordvation (Honeywell Building Automation): Definitely impacting the growth. It still remains a smaller part of our business, but it’s one that has been growing naturally as well as our focus on it. So we see very strong double digits, north of teens, obviously. And our play there is across all the controlled domains in which we operate. Our advanced fire detection, fire control system is the leading solution in data centers now.

We’ve recently introduced a new control product. It’s a PLC that sits between what we saw a sweet spot between the industrial PLCs and the traditional building controls, and that’s starting to gain traction as a strong offering for that. And we’ll continue to add in more specific offerings for data centers as we go.

Nigel Coe, Analyst, Wolfe Research: Okay. That’s great. R and D investments, however you want to define it, where has that been running in the past for your business? And I know Wimal is very keen to see you guys spending more, not just you, but across the portfolio. Where do you see R and D going for Build Automation?

Bill Hamoud, President and CEO, Build Nordvation (Honeywell Building Automation): Definitely in line with what Wimal has been sharing about Honeywell. The 50 bps as a percent of sales increase we saw in Q1 across Honeywell, definitely Building Automation was a part of that. And there are different ways to create more capacity around R and D. Pure dollar investment, like we just talked about, is one of those. The other one is around the productivity of your R and D resources.

As we sit in this room today about a year ago, we rolled out to our software developers AI tools that will make a proposal to the software engineers to say, use this line of code. And we track that every month and we see continuous uptake of software developers taking more and more of what the AI tool is recommending to them. That by itself in a very short year has created a double digit increase in productivity in our software engineers. Even though we’re investing more than that, our output is growing at a higher rate because of that productivity gain. And then the third leg of that stool is just a constant discipline on looking at every dollar that’s being spent and asking yourself, is it being spent on the right place?

Is it the right path? The value proposition that we had as a hypothesis, has it proven to be holding through? Or do we need to make some tweaks on it? So these three things come together to give you stronger output on what you provide on new products that is measured not only by how much more dollars you’re putting into it, but by these other things.

Nigel Coe, Analyst, Wolfe Research: 50 basis points, that’s quite a big jump. I mean, obviously, quarter by quarter, it varies. But we’re thinking about each year for the next two or three years. Is that 20 bps, 30 bps per annum?

Bill Hamoud, President and CEO, Build Nordvation (Honeywell Building Automation): Josh and I, we have a semi joke that we’ve done within building automation with our teams. We always talk about we have no dollars to invest in fixed costs, but we have unlimited dollars to invest in both. You know? And I first started at Honeywell, I was much younger than now, it was twenty one years ago. One thing that’s true, our ability we never have a problem coming up with new products because our engineers cannot do it.

Our engineers can engineer and our software developers, they can engineer just about everything. Our challenge is making sure that we find the right differentiated value proposition for the right customer. To the extent that we continue to challenge ourselves to find those ideas for investment, we’re going to continue to invest.

Nigel Coe, Analyst, Wolfe Research: Okay. Maybe a better way of putting it would be vitality. Yes. Where is vitality run today? Where could that go?

And what does vitality mean in terms of growth pricing margin?

Bill Hamoud, President and CEO, Build Nordvation (Honeywell Building Automation): Yes. Vitality sits there around 25%, which if I look at from a growth algorithm standpoint, it’s something that we can measure. It’s a few percentage points ahead of where it was historically. And in terms of the opportunity for margin expansion, and that’s through probably across all of our automation business, not just buildings. The value of the product that we sell to our customers, and I think about by my system integrator customers, my portion of that overall spend is less than 20%.

To the extent I’m able to tap into that other 80% they don’t spend with me, to make it easier for them to implement something, to make it to give them the ability to execute more projects with the same labor pool, now there’s a very strong value unlock. And that is exactly what our connected and software solutions are doing. It’s no longer just about the remote monitoring. It’s about smarter commissioning. It’s about over the lifetime of that asset, that asset being a little bit smarter than raising its hand when it sees a problem.

So there’s a very strong value unlock there that gets into the way that our customers deliver. The last thing I’ll say about that, ten, fifteen years ago, when you talked about, hey, I can do something remotely or less labor, the value equation was around, okay, it cost me $50 an hour, how many hours do I save, that’s the value. Today, you talk to customers, and that’s true in just about every company in which we operate, one of the top obstacles to growth is the availability of skilled labor. To the extent we’re able to allow them to do it more quickly, all of a sudden, that becomes part of our customers’ own growth factor, and there’s a lot of value to unlock there, and there’s a lot of margin opportunities that come along with that.

Nigel Coe, Analyst, Wolfe Research: Great. I definitely want come back to software and IoT in a moment because I think that’s very important. But thinking about the way that you’ve set up the year, you just put in 8% for 1Q. Think you’re looking at maybe mid single digits or maybe a bit below mid single digits for 2Q and then mid singles for the back half of the year. So what’s driving that deceleration that you’re seeing, especially in 2Q versus 1Q?

Bill Hamoud, President and CEO, Build Nordvation (Honeywell Building Automation): Yes. On the one hand, you’ve got things that are under our control, a strong conviction and what we’ve done to focus our teams on the high growth verticals, the strong uptake that we’re seeing from our customers and our new products, things that are out of control that adds strong momentum for us. On the other side, you’ve got things we cannot control, the entire uncertainty around tariffs. So I’d like to think what we’ve looked at right now is a pragmatic approach that takes all of these factors into play, and that’s what’s creating our guide.

Nigel Coe, Analyst, Wolfe Research: Okay. From what you can see, I mean, are tariffs driving any unusual behavior? I mean, you do sell through independent channels, contractors. Is that driving any unusual that you can see?

Bill Hamoud, President and CEO, Build Nordvation (Honeywell Building Automation): We are staying super close to our customers. It’s a time of uncertainty. I think at the beginning, was a lot of fear of that uncertainty. As things have settled down a little bit, even though we talk about ninety day pause, I think there’s a natural optimism that, that ninety day pause would translate into a more permanent pause. But at the same time, especially some of our bigger customers, they are looking at that and saying, okay, we have to see what happens and how that’s going to impact our overall ecosystem.

Nigel Coe, Analyst, Wolfe Research: Brexit is what we hear and I’ll swear by the way. There’s also been a fair amount of concern around non res construction in general, especially some of the larger projects like a push given the macro uncertainty. Have seen anything like that across your end markets?

Bill Hamoud, President and CEO, Build Nordvation (Honeywell Building Automation): On the larger projects, especially when you think about critical projects such as data centers and some other critical infrastructure, those are bigger investments that people make longer cycle, less of a concern around that. Maybe some of the smaller projects on the one side, somebody may accelerate it to get ahead of the tariffs or maybe pause a little bit. I will have to say, though, past the ninety days, if some of what we talked about in early April comes to fruition, that’s going to cause everybody to rethink what they’re going to do even on long term projects.

Nigel Coe, Analyst, Wolfe Research: Great. And then just maybe just one more on this topic. Obviously, we’ve got The U. S. Mega projects.

Eaton talks about $1,700,000,000,000 of projects out there in the pipeline. What sort of when you look at this funnel, I mean, what does that mean for Honeywell in terms of content, in terms of opportunity?

Bill Hamoud, President and CEO, Build Nordvation (Honeywell Building Automation): Yes. I mean, you look at a funnel for a long cycle business, it definitely supports what we’ve laid out there. The goal for building automation to be in the mid to high single digits. We see that playing out quite nicely for us.

Nigel Coe, Analyst, Wolfe Research: So Access Solutions turns organic in, I think, March. ’3 weeks. Okay, two Maybe just recap on what the first year of ownership of assets, what have you done to it? I know there was a very strong revenue synergy opportunity globalizing that business. Let me just recap us on two of the three major things that have happened since you’ve owned this asset.

Bill Hamoud, President and CEO, Build Nordvation (Honeywell Building Automation): I’ll start with the revenue synergies. One, historically, that business prior to becoming part of Honeywell was primarily North American business. 7080% of it was North America. You look at building automation, about onethree of our business is U. S, twothree is outside The U.

S, hundreds of salespeople trained on it. A lot of excitement and a lot of strong uptake from our salespeople as well as our customers that are driving our sales synergies to be ahead of where we had committed to when we looked at making the acquisition. Beyond that, we’ve shifted a lot of investment into Access Solutions on the R and D front. We see that, that customer set is probably the most forward thinking in terms of thinking about the Connected Journey to be through cloud native journey. So we’ve put a lot of investments since we’ve acquired the business into that area.

And we see possibilities on the architecture, which will play out in Buildings as well as Industrial, that Smart Edge to Cloud piece. It will probably happen first, not that it will happen first in the Security and Access Solutions space, and we’ve been putting a lot of work into that area.

Nigel Coe, Analyst, Wolfe Research: Okay. I think when you acquired that business, think the margins were in the high 30s, 40% maybe. Is that because there was underinvestment in that business and you had to then raise that NPI spend and R and D? Or is that just the nature of the business? This is a very high margin business.

Bill Hamoud, President and CEO, Build Nordvation (Honeywell Building Automation): No. We definitely see opportunities to invest organically and inorganically into that business, and we have been doing it, and that’s reflected whatever the impact of that is already reflected in our results. The true margin on that is the value creation that, that business does. The scalability of the Lennell S2 solution as an access solution for a large enterprise, No one in the world can come anywhere near it. The piece for us, how do we sustain the growth of such a high growth, high margin business?

And this is where all of our investments are coming in to make it more fully integrated security as well as access solution platform and continue to make sure that we leverage the scalability and make it more scalable as a cloud native solution.

Nigel Coe, Analyst, Wolfe Research: Okay. And what are the barriers to taking the Access Solutions business to Europe and Asia? Are there any barriers? I mean, are there any coding differences that we should be aware of? REPRESENTATIVE:]

Bill Hamoud, President and CEO, Build Nordvation (Honeywell Building Automation): We are there will be some in there, but nothing major. It’s nowhere near what we see in our file business where you have most selective codes from lesion to lesion. We’re seeing the uptick there. We’re already seeing that start to manifest itself in our sales synergy. It’s part of our 2025 growth algorithm.

Nigel Coe, Analyst, Wolfe Research: And of course, Saxos becomes organic in the second half of the year. Is that going to be helpful or hurtful?

Bill Hamoud, President and CEO, Build Nordvation (Honeywell Building Automation): It’s at least as good, if not better than.

Nigel Coe, Analyst, Wolfe Research: Great. Maybe switching to I’d like to touch on the importance of having the solutions, which is design, install, servicing and the product side as well? How much synergy is there between the two sides of your business?

Bill Hamoud, President and CEO, Build Nordvation (Honeywell Building Automation): Our solutions are built on the technology capabilities of our product business. One thing that we’re talking about earlier today, we sell a lot of products to our solutions business. And our bias is we take the projects that have heavier first party content for a number of reasons, not the least of which the strength of the value proposition. So it builds on that. The other thing that it does, most strategically, is that it creates a stronger connection between us and the customer.

The days of developing something on the lab and putting it out there are long gone. We can do it, but doesn’t mean you’re going to be successful. So the concept of co creation is a very prevalent one, one that Wimal talks about across our entire business and that we’re all quite keen on. So that direct connection allows us to drive co creation. And two distinct but very valuable vectors of value creation, one around the value of that solution to the end user and the other one working with our system integrators as well as our own technicians to say, how do we make that solution easier to install, how to make it easier to commission, easier to service.

To give you an idea, a couple of years ago, to walk into a building and provide a connected solution, it would have taken us days. The offerings we just launched now, we’re launching with our channel partners, it’s taken hours. We put the target out there. We said it should be less than a day, should be ten hours. That was my own target.

And every once in a while, my team is more ambitious than me, and I’m glad for that. In some cases, they’re doing it less than five hours. Okay.

Nigel Coe, Analyst, Wolfe Research: And when you’re integrating third party content, so one of your competitors in theory, why is that? Is that because they’ve been specified by the, I don’t know, the build no no, the general contractor or the E and C? Or is it largely because you don’t actually have that product set?

Bill Hamoud, President and CEO, Build Nordvation (Honeywell Building Automation): It’s just more of the latter. Seldom, if ever, in some projects, depending on the size, Josh and I get to see them and with the official approvals on them. And that’s one of the things that it’s part of our team’s standard of They look at all the product and software content. And we check the box, is this something we can provide? Yes or no.

And if we can, then the better will be coming from us. And that’s, by the way, has played out quite nicely for the Nel S2 offering from the Access Solution acquisition because now all of a sudden, we’re able to create more capability that goes into our projects business. So it ends up being stuff that we just don’t have in our portfolio that we integrate, third party.

Nigel Coe, Analyst, Wolfe Research: UNIDENTIFIED Any questions from the audience before we move on? No. Okay, great. Margins. So I do want to touch on margins.

I believe last year you reported 25% and change, 25.7 margin. This year I think we’re in the 26.2%, twenty six point three %, maybe 26.5% zone. Your long term target I believe is 20%, twenty nine %. That’s what it was last time we heard publicly, but what are the stepping stones to a higher margin for BA?

Bill Hamoud, President and CEO, Build Nordvation (Honeywell Building Automation): Two pieces, one around the execution, one around the strategy. On the execution side, and this is something that’s well in vain in our DNA and we do well, The combination of investment plus pricing has to be greater than inflation plus productivity plus pricing has to be greater than inflation plus investment. And that algorithm has been there and continues to be part of our margin expansion algorithm, and we saw very nice margin expansion in the first quarter. The other piece of it, more strategically, is around some of the stuff we talked about earlier. How do we continue to drive within our mix, more of these solutions that get at how our customers do their jobs, so it creates more value for them, so that there’s an opportunity there for us to sell more of these software connected solutions that drive higher margins.

Nigel Coe, Analyst, Wolfe Research: Pricing and cost. Let’s talk about tariffs. I mean, obviously, there’s been a lot of news around tariffs. China tariffs have come back. How has the whole sort of supply chain, tariff situation, pricing negotiations, how has that changed the business for you in the last two or three months?

Bill Hamoud, President and CEO, Build Nordvation (Honeywell Building Automation): Yes. I’ll start by saying, I mean, we have a natural obligation to minimize the impact of those tariffs for us and for our customers in connection. There’s a very strong relationship on joint success between us and our customers, especially on the system integration side. Within building automation, we have the benefit of after 2018, after COVID, we put a lot of investment in not only looking at how we consolidate our rooftops, but also how do we make regions more independent. So if I looked at our major regions, they’re more than 80% local for local.

That automatically gives us an inherent advantage in terms of dealing with it better. And then the instances where we have

Unidentified speaker: to make different choices, we’re able to execute on those choices in weeks as opposed to month. Other approach thus far has that

Bill Hamoud, President and CEO, Build Nordvation (Honeywell Building Automation): our customers see that goodness, and they see less of an impact as it relates to tariffs from us as they do from our competition. And that is indeed the case as we sit here in this room. We have to continue watching to make sure that it’s a dynamic environment and it’s the right thing

Nigel Coe, Analyst, Wolfe Research: to do

Bill, you mentioned software a number of times now. So I’m guessing you’re itching to talk about software. Look, we’ve heard a number of your competitors have made big splashy announcements around IoT and then we hear nothing else. Maybe just talk about where Forge is right now penetrated within the Build and Innovation business and some of the success stories you’ve had? And where do you see the potential for software going forward?

Bill Hamoud, President and CEO, Build Nordvation (Honeywell Building Automation): Yes. It’s you said it very well, Nigel. Probably, if I think back $7.08 years ago, everybody had a big special announcement, including us. And as it turned out, the journey to have those visions materialize were more arduous than anybody expected, including ourselves. The difference is we stuck with it.

And the difference is when I look across our automation business and Industrial Automation and Building Automation, those same enabling those building blocks apply equally as well across the business. So it gave us more staying power in terms of that four gs ecosystem and developing it and the applicability of that ecosystem across the board. I’ll point out to a couple of things. One is when you look at organic homegrown software solutions that were not acquired, we probably have within Honeywell the most successful one of the most, if not the most successful businesses that was built from zero to being a scaled business around our Force Connected Life Safety software offering. And the big lesson learned from us there, the success of that scaling came about from our ability to extend that to our channel partners.

That model works. You come up with the right value proposition, the right offering, the ability of our channel partners to scale, magnitude and speed wise, far exceeds any one company, us as well as any of our big competitors to do it. We’re applying that same concept across the rest of our four software offering. In fact, just as we sit here in this room for the last several weeks, we’ve gone out to two regions, different countries within the world, rather than our own salespeople as well as our customers, and we’ve trained them on these new products. To do that, though, we took great care and made a very big investment in saying, it’s not enough for the solution to be sexy and attractive to the end user.

It has to become easier to implement. Easier to implement, we talked about earlier, you go from days to hours. But just how do you transact? A lot of our customers are not accustomed to a recurring revenue model. We created that entire ecosystem from the business, commercial, administrative, all the way to the offing itself and how you implement it and how you keep an eye on it to bring that success to our channel partners.

And as an association, we’ll be able to scale that. What I just described now in terms of opening it up to the broader channel partner community, that’s probably something unique for Honeywell in this industry that no one else has done.

Nigel Coe, Analyst, Wolfe Research: Just to be clear, you’re selling Forge solutions by your channel partners?

Bill Hamoud, President and CEO, Build Nordvation (Honeywell Building Automation): Indeed. We just started that now. Okay.

Nigel Coe, Analyst, Wolfe Research: Maybe just help us out in terms of how big is Forge, the software IoT platform within BA?

Bill Hamoud, President and CEO, Build Nordvation (Honeywell Building Automation): Yes. Overall, for Honeywell, we talked about Connected Enterprise business being $2,000,000,000 and a lot of that sits in IA MBA. So that kind of gives you an idea of the scale of what it is.

Nigel Coe, Analyst, Wolfe Research: And then I think you hinted as well, automation within the building doesn’t necessarily it’s not radically different from automation in industrial environments or automation in the process plant, etcetera. So from your perspective, how much overlap is there? When we think about the new Honeywell, the Honeywell automation RemainCo business, how much technology overlap will there be across the remaining businesses?

Bill Hamoud, President and CEO, Build Nordvation (Honeywell Building Automation): When I think about the four gs ecosystem and the building blocks of that, 100% applicable. In fact, when I look at the even the big software integration platforms and buildings, have something called Enterprise Building Integrator, EBI, which is the backbone of what we do in the solutions space. That is the exact same platform that we use on the Industrial Automation side. We call it Experian. Just twin sister or whatever you want to call it, same backbone.

So very relevant. It’s just that last mile, if you will, of how you customize it and configure it to that specific customer.

Nigel Coe, Analyst, Wolfe Research: And just my final question. There’s a big debate on Wall Street about what kind of growth Fire and Security businesses are, right, going forward. Are these low growth businesses? We’ve seen Carrier selling their FNS business. We’ve seen Stanley had a niche business.

Ingersoll Rand back in the day as well. From what I can see, only yourself and JCI really has an end to end capability from soups to nuns, basically, from front end to back end. Is that the right answer that you have to be a scale player in this business? Or are there other reasons?

Bill Hamoud, President and CEO, Build Nordvation (Honeywell Building Automation): Yes. Two parts to that. Just if I talk about File and Security to start, probably Security is one of the biggest in the control domain, the building control domain, and it probably has the biggest upside of growth, especially as people wanting to go people no longer want the responsibility and the burden of maintaining on prem solutions. And the security space is probably the first one that’s going to go full cloud native that look to us and our ecosystem partners to say, it’s your responsibility to patch and maintain and upgrade and make sure that everything is safe. That’s going to create its own growth trajectory.

On the F5 side, it’s a highly regulated business. And a lot of countries and they’re pretty good at it, they say, those are the placement cycle, you must follow that replacement cycle, you don’t have a choice. Add to that what we’ve done in Honeywell on the Connected Life Safety, for example. I don’t need Connected Life Safety to run a file system. But boy, that stronger, quicker transmission of the file signal to the first responders, coupled with the fact that the system integrator maintaining it can do a lot of that stuff remotely, that creates on growth factor.

And then comes specifically to your question about some of our peers, and obviously, can start to the strategy better. You see a lot of people going for pure play pieces. Even some of the names that you mentioned, that play in multiple domains, controlled domains, The one of the bigger parts of the business around that appliance, which is an HVAC appliance. In Building Automation, there’s no appliance. We are appliance agnostic.

Our our DNA, our differentiated value proposition has for decades come from that controls domain. That’s through across all of our automation business. So what may be HVAC as a pure play for somebody because that’s what pedigree is. For us, our pure play is controls. And how do you evolve that into analytics?

How do you evolve that into more AI? How do you evolve that into a journey towards a truly autonomous factory and a truly autonomous building?

Nigel Coe, Analyst, Wolfe Research: Great answer. Bilal, that’s great discussion. Unfortunately, we’re out of time. So thank you very much.

Bill Hamoud, President and CEO, Build Nordvation (Honeywell Building Automation): Pleasure. Enjoy your luck. You. Thanks. Nigel.

Yes.

Nigel Coe, Analyst, Wolfe Research: This presentation has now finished. Please check back shortly for the archive.

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