Honeywell International is to split into three independent businesses, spinning off its aerospace division from its automation business, while progressing with previously announced plans to separate its advanced-materials division.
"Our simplification of Honeywell has rapidly advanced over the past year, and we will continue to shape our portfolio to create further shareholder value,” said Vimal Kapur, Chairman and CEO of Honeywell.
Kapur added that the separation would create three publicly listed companies, with each pursuing its own growth strategy.
Since December 2023, Honeywell has aimed to drive growth and simplify its portfolio, following the realignment of its business segments, including approximately $9 billion of accretive acquisitions.
This announcement comes after activist investor Elliott Investment Management called for a split of Honeywell's aerospace and automation businesses in November 2024, shortly after taking a more than $5 billion stake in the company.
In December 2024, Elliott Investment Management said it “welcomed” Honeywell's evaluation of divesting its aerospace business.
Honeywell Automation and Honeywell Aerospace are each expected to maintain a strong investment grade credit rating, with the separation of the Automation and Aerospace businesses to be completed in a manner that is “tax-free to Honeywell shareholders" during the second half of 2026.
In addition to this, the company also reported full year and fourth quarter results on February 6, 2025. Honeywell said that the results for both its fourth quarter and for 2024 “met or exceeded” the company's updated full-year guidance
Honeywell accumulated $39.6bn worth of sales during 2024, up by 5% from 2023. During the year’s fourth quarter the company reported sales of $10.1bn, up 7% on the year prior.
For the year, Honeywell recorded an operating cash flow of $6.1bn, adjusted earnings per share of $8.71 and free cash flow at the “high end” of the company’s guidance, totalling $4.9bn.
During the fourth quarter of 2024, operating income grew by 10% compared to the previous year, increasing by 0.5 percentage points to 17.3%. Operating cash flow was down 23% in comparison to the year prior, totalling $2.3bn. Free cash flow was also down by 27% in comparison to 2023, dropping to $1.9bn. Adjusted earnings per share “exceeded” company guidance at $2.47 per share, despite being down 8% in comparison to 2023.
Looking ahead to 2025, Honeywell projects sales to total between $39.6 and $40.6bn, representing organic growth of up to 5%. Operating cash flow is expected to fall in the region of $6.7 and $7.1bn, with free cash flow expected to total between free cash flow between $5.4 and $5.8bn.
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