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5. Honeywell International Inc. Business Report FY ended Dec. 2017

Honeywell International Inc. Business Report FY ended Dec. 2017

Factors
1) Net Sales
-The Company’s net sales for the fiscal year ended December 31, 2017 increased by 3.1% over the previous year to USD 40,534 million. The increase in net sales was primarily due to gains in the Company’s Aerospace, Home and Building Technologies, and Safety and Productivity Solutions segments. These gains were partially offset by a decrease in sales in the Performance Materials and Technologies segment. The effects of foreign currency translation did not impact sales positively or negatively.

2) Transportation Systems Division sales
-Sales in the Transportation Systems unit with the Aerospace segment in the fiscal year ended December 31, 2017 totaled USD 3,148 million, an increase of 3.0% over the previous year. The increase in sales was caused by increased commercial vehicle volumes, increased penetration of gasoline turbochargers, and a favorable impact from foreign currency translation. Lower diesel turbocharger sales partially offset these gains.

Recent Developments

-The Company’s Honeywell Japan Inc. subsidiary will start sales in Japan of "Solstice yf," a next-generation refrigerant for car air-conditioners with a global warming potential (GWP) of less than 1. The Company is responding to increasing demand for refrigerants for next-generation air-conditioners that are used in imported European vehicles, as well as future expansion of demand to comply with stricter environmental regulations. Honeywell Japan is aiming to keep its market leading share in the automotive refrigerant market by establishing a sales network in Japan before next-generation refrigerants become popular. (From an article in the Nikkan Jidosha Shimbun on January 20, 2017)

Restructuring

-The Company announced that it is making changes to its portfolio which includes spinning off its transportation systems business as well as its homes product portfolio and ADI global distribution business into two standalone, publicly traded companies. The planned separation transactions are expected to be completed by the end of 2018. The new transportation systems business will be a global leader in turbocharger technologies with best-in-class engineering capabilities for a broad range of engine types across global automobile, truck and other vehicle markets with expected annual revenue of approximately USD 3 billion. The new homes and global distribution business will be a leader in home HVAC controls and fire security products with expected annual revenue of approximately USD 4.5 billion. (From a press release on October 10, 2017)

Awards

-The Company announced that it has received a 2017 Automotive News PACE “Innovation Partnership Award” with Volkswagen for the unique level of collaboration demonstrated in developing a Variable Nozzle Turbine (VNT) turbocharger for gasoline engines. The Company developed the VNT turbocharger for the Volkswagen Group’s 1.5-L gasoline engine to be used in various Volkswagen and Audi models. (From a press release on April 3, 2017)

R&D Structure

-The Company has approximately 23,000 engineers working in research and development, including 11,000 software developers.

R&D Facilities

-The Company has approximately 150 global research and engineering facilities.

Technological Alliance

-Karamba Security announced that it will collaborate with the Company, Alpine, and IAV to create multi-layered solutions to secure connected and autonomous vehicles. The collaboration will feature a cyberattack prevention solution with zero false positives, provided by Karamba Security. The Company will provide an OEM Security Operations Center (SOC) where attack attempts will be reported. Alpine will secure infotainment systems. IAV will provide engineering and integration services. (From a press release on December 18, 2017)

-The Company and Lear announced that they are collaborating to provide automotive software technology and infrastructure solutions to address threats associated with connected and autonomous vehicle development. The two companies have developed a system to identify and validate software commands and data generated by more than 100 million lines of code governing modern vehicle operation. The Company’s software and global security centers monitor in-vehicle network communications, while Lear’s electrical gateways and security modules provide a toolset to detect and report anomalies preceding a failure or intentional hack of the vehicle. Captured data can be transmitted in either real time or via a scheduled download to Company security centers for analysis and remediation. (From a press release on September 12, 2017)

Product Development

Gasoline turbocharger at IAA 2017
-The Company announced its newest gasoline turbocharger technology developed to improve power and torque and reduce vehicle emissions will debut on the new BMW 2.0L engine program announced at IAA 2017 in Frankfurt. The new technology represents the Company’s third-generation gasoline turbocharger architecture that has been updated and designed for twin-scroll, 4-cylinder engines that are 1.5 liters and larger. The new generation has shown representative increases in power from 90 kW/L to more than 100 kW/L and in torque from 175 Nm/L to more than 200 Nm/L over the previous generation. One of the new advances is a new wastegate with a mono-block arm and valve. This one-piece design replaces a traditional three-piece valve, reducing noise by 5 to 10 decibels and improving fuel economy by up to 0.5%. (From a press release on September 13, 2017)

Patents

-Through the fiscal year ended December 31, 2016, the Company has approximately 38,000 patents granted or pending.

-The Company expects to invest approximately USD 900 million in the fiscal year ending December 31, 2018 in capital expenditures. The investment will be primarily dedicated towards growth, production and capacity expansions, cost reduction, maintenance and infrastructure replacement.

Investments in U.S.

-The Company announced that production facilities for its Solstice next-generation air conditioning refrigerant (HFO-1234yf), which was newly added to its Geismar manufacturing site in Louisiana, U.S., have begun commercial operations. The Company has not disclosed the facilities' annual production capacity, but it says the capacity will be one of the world's highest among refrigerant production sites. The Company has invested USD 300 million in the facilities. The Company will support automakers in their environmentally friendly technology development by supplying next-generation refrigerants with low global warming potential values from the new site. (From an article in the Nikkan Jidosha Shimbun on June 1, 2017)