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Honeywell Pursues $1 Billion in Sustainable Technology Revenues

February 2, 2024 by Joe Panettieri

Honeywell International expects its Sustainable Technology Business to generate $1 billion in revenues "in the next few years," CEO Vimal Kapur told Wall Street analysts during Honeywell's Q4 2023 earnings call.

The sustainability effort is part of Honeywell's larger business focus -- which spans:

  1. Aerospace
  2. Building automation
  3. Performance materials and technologies
  4. Safety and productivity solutions

Honeywell's Sustainable Technology Solutions: Example Offerings

On the building automation front, the company promotes Honeywell Buildings Sustainability Manager, a software tool powered by the Honeywell Forge platform. Honeywell positions Buildings Sustainability Manager as an autonomous controls platform, with a "suite of applications to help customers address two pressing, yet often conflicting objectives: optimizing indoor air quality and reducing the environmental impact of buildings with the aim of improving carbon-reduction goals."

Among the latest offerings: Honeywell in January 2024 unveiled Advance Control for Buildings, a building management technology platform that leverages existing wiring.

The company also focuses on emerging IT opportunities such as quantum computing. The evidence: Quantinuum, a quantum computing owned by Honeywell, raised $300 million at a pre-money valuation of $5 billion in January 2024.

On the energy transition front, key Honeywell technologies include Battery Energy Storage Systems and Power Manager -- coupled with Honeywell's consulting services.

And the Honeywell Partner Program spans ISVs (independent software vendors), value-added resellers (VARs) and distributors. We don't know if the company has multi-tenant software tools and recurring revenue programs for established and aspiring MSPs (managed IT service providers).

Building Automation and Sustainability: Regulations and Market Growth Forecasts

Demand for sustainable technology solutions -- especially in the building and real estate sectors -- appears to be strong. Among the reasons:

Honeywell Business Challenges, Sustainability Opportunities

Honeywell's business is healthy, but some concerns about Honeywell's overall sales outlook surfaced during an earnings call on February 1, 2024, SeekingAlpha noted. The specifics: Honeywell expects sales to grow 4% to 6% to a range of $38.1 billion to $38.9 billion in 2024, compared with the consensus estimate of $39 billion, SeekingAlpha noted.

Still, Kapur tried to put growth opportunities in context. In an earnings release, he stated: "As we look toward 2024, our portfolio is well positioned to accelerate both our top line and earnings growth, underpinned by three compelling megatrends — automation, the future of aviation, and energy transition. I am confident that 2024 will be another year of value creation for our shareowners, our customers, and our employees."

Sustainability was a central topic during the company's earnings call with Wall Street analysts. Among the sound bites that Kapur shared:

  • In oder to drive growth, Honeywell is "enhancing our innovations playbook, accelerating our offering in sustainability and software, monetizing our installed-base and leveraging our leadership position in high-growth regions."
  • In the energy sector, Honeywell's battery energy storage solution will be deployed to six solar parks in United States Virgin Islands -- ultimately providing "30% of the energy need through renewable sources."
  • The company will incorporate hydrogen purification and carbon capture technologies into multi-billion dollar low carbon ammonia projects.
  • In Sustainable Technology Solutions, "robust demand will lead to another record year of growth" -- though Kapur didn't mention specific dollar figures.
  • "Our plans to have sustainable technology business of $1 billion in next few years haven't changed. And my confidence of that absolutely has only grown higher over the last few months."

Admittedly, Honeywell faces plenty of competition in the sustainable technology market. Key rivals on some fronts include Schneider Electric, Johnson Controls and numerous startups. We'll be watching for key updates from each firm.

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