Q3 2024 Honeywell International Inc Earnings Call
Thank you for standing by and welcome to the Honeywell third quarter 2024 earnings Conference call. At this time all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session. Please be advised that today's call is being recorded I would now.
Speaker Change: I'd like to hand, the call over to Sean Meakin, Vice President of Investor Relations. Please go ahead.
Sean Meakin: Thank you.
Sean Meakin: Good morning, and welcome to Honeywell's third quarter 2024 earnings Conference call.
Sean Meakin: On the call with me today are chairman and Chief Executive Officer of Kimball Gabor, Senior Vice President and Chief Financial Officer, Greg Lewis and Vice President of corporate Finance, Mike stepped back.
Speaker Change: This webcast and the presentation materials, including non-GAAP reconciliations are available on our Investor Relations website from time to time, we post new information that may be of interest or material to our investors on this website.
Speaker Change: Our discussion today includes forward looking statements that are based on our best view of the world and of our businesses as we see them today.
Speaker Change: Subject to risks and uncertainties, including the one described in our SEC filings.
Speaker Change: Despite sales coming in below our guided range.
Speaker Change: Near term delays in a couple of the projects led businesses lack of short cycle improvement and some discrete supply chain disruption in September in aerospace have caused us to re based on our expectations for the year, although the organic growth of 3% in the quarter was below our guidance. We continue to be encouraged by sustained strength in aerospace technologies output.
Speaker Change: For the sequential progress in building automation and ongoing positive order trends before we dive down into a more detailed discussion on the results and updated outlook for 2024, I would like to reiterate the strategic priorities that are cornerstone of my tenure as CEO and our latest progress against them fast.
Speaker Change: <unk> is the acceleration of profitable organic growth towards the upper end of our long term target range of 4% to 7% while our recent performance has been below this target we are accelerating driving new product innovation and commercial excellence to support higher growth rates in future and we are already seeing returns of this strategy, we booked a record.
Speaker Change: $1 billion of orders in Europe, showing the strength of our technology and the promise of our sustainability offerings. This quarter Electra selected Honeywell's flight control computers, and electromechanical actuation system for its hybrid electric short takeoff and landing aircraft earlier this week.
Speaker Change: We announced a new partnership with Google cloud, leveraging Google's vertex AI and Honeywell forge to accelerate our customer transition from automation to autonomous operations by continuing to focus our effort on these key strategies. We are confident that we will be able to deliver organic growth.
Speaker Change: At upper end of our long range in the future second we are making headway on the evolution of our accelerator operating system transforming the way we run the company to extract incremental value from our operations and drive growth accelerators, unlocking new ways for us to leverage our well established digital backbone to end.
Speaker Change: <unk> top line growth and expand margins. In addition to successfully integrating our recent portfolio additions we are leveraging our digital domain through our Honeywell Forge Iot platform, creating recurring revenue streams that are delivering increased value for our customers and shareholders alike and third we are accelerating.
Speaker Change: In sustainability focused specialty chemicals and materials advanced materials will be positioned to benefit from financial flexibility to pursue the next generation of sustainable refrigerants and other valuable solution for our customers in electronic materials that support the semiconductor industry industrial grade fibers and highly <unk>.
Speaker Change: <unk> healthcare application. This quarter. We also made the decision to reclassify the personal protective equipment or PPE business as asset held for sale.
Speaker Change: This move will help us further strengthen our core business and will be accretive to honeywell's organic growth and margin rate. We will provide more details bonds is sale has been announced the acquisitions. We have made this year along with the share buybacks dividends and high return Capex will add up to a record $14 billion in capital dipped.
Speaker Change: Lloyd in 2024.
Speaker Change: We believe this demonstrates meaningful progress towards strengthening and simplifying our portfolio. However, our work is not yet done and will continue to leverage portfolio optimization as a fundamental pillar of growth and margin enhancement into 2025 and beyond.
Speaker Change: Now, let me turn to Greg on slide five to discuss our third quarter results in more detail as well as provide an update on the fourth quarter and full year guidance.
Greg Lewis: Thank you <unk> and good morning, everyone I'll begin on slide five we navigated through a challenging operational environment in the third quarter delivering segment margin and adjusted earnings per share above the high end of our guidance range and 10% increase cash flow despite coming in below our sales guidance.
Greg Lewis: The main driver of the sales Miss was performance below our prior expectations in industrial automation as our revenues were sequentially flat across the portfolio.
Greg Lewis: We were also impacted by some discrete manufacturing disruptions in September, including Hurricane Helane and a separate fire at one of our aerospace technology plants.
Speaker Change: Quarter with $2 1 billion in M&A 700 million of dividends and $300 million and high return capital expenditures as Jim highlighted we made significant progress this quarter and are on track to deploy over $14 billion in capital this year and our work is not yet done as we continue to leverage our balance.
Speaker Change: <unk> into 2025 reshaping the portfolio.
Speaker Change: Now, let's spend a few minutes on the third quarter performance by business.
Speaker Change: And aerospace technologies sales were up 10% organically year over year, the ninth consecutive quarter of double digit growth.
Speaker Change: Sales were led by double digit growth in defense and space, where we continue to unlock volume from our robust backlog through sustained global demand and.
Speaker Change: In commercial aviation, we saw another quarter of double digit growth in original equipment sales as chipset deliveries increased with particular strength in business and general aviation.
Speaker Change: Commercial aftermarket saw continued growth as global flight activity continues to rise.
Despite some discrete supply chain disruptions in September that impacted our air transport OE business output improved 13% in the quarter as we made sequential progress in supply chain, the ninth consecutive quarter of double digit output growth.
Speaker Change: Segment margin remained flat year over year at 27, 7% in the third quarter as commercial excellence and productivity actions were offset by cost inflation and mix pressure within original equipment industrial automation sales were flat sequentially, but decreased 5% organically in the quarter, primarily due to lower volumes and warehouse.
Speaker Change: And workflow solutions and short cycle safety and sensing technologies process solutions sales grew 2% year over year and 1% sequentially in the quarter driven by strength in our aftermarket services and compressor controls businesses, partially offset by demand softness in smart energy and thermal solutions as well as some delays in our projects.
Speaker Change: Seeing end market backdrop, we are revising our full year sales guidance range, while increasing the midpoint of our segment margin guidance. We are narrowing our adjusted EPS guidance to the high end of the prior range due to that margin outlook combined with favorable adjustment to our effective tax rate.
Speaker Change: While our pace of sales is not degraded we have not seen the short cycle acceleration, which we anticipated by this point in the year and it's appropriate to reflect that as well as the energy related and Aero output push outs in our outlook.
Speaker Change: Our demand profile remains healthy with book to Bill of one one and record backlog and we are confident in our ability to accelerate growth within our long term framework in the coming quarters.
Speaker Change: We now expect full year sales to be in the range of 38, 6% to $38 $8 billion, representing organic growth of 3% to 4% down from 5% to 6% previously.
Speaker Change: The lower guide reflects the lower third quarter results, a slower recovery in industrial automation and more tempered expectations in pockets of aerospace and energy markets in the fourth quarter.
Speaker Change: As a reminder, our guidance includes the impact of all four acquisitions access solutions chip, it's an IV case and LNG now all closed.
Speaker Change: Collectively they will add approximately $800 million in sales in 2024, consistent with prior communications for the fourth quarter, we anticipate sales in the range of $10 2 billion to $10 $4 billion up 2% to 4% organically.
Speaker Change: Sales should increase sequentially across the portfolio led by aerospace as we experienced additional supply chain unlock as well as continued growth in flight hours and chipset deliveries turning to segment margins are strong result in the third quarter and our commercial excellence and productivity playbook are supporting our bottom line.
Speaker Change: As a result, we're narrowing our overall segment margin guidance towards the high end now expecting to end the year between $23 four and 23, 5% flat to 10 basis points from 2023.
Speaker Change: Yeah.
Speaker Change: Moving to other key guided metrics net below the line is now expected to be between negative $650 million and negative $700 million for the full year.
Speaker Change: For the fourth quarter net below the line is expected to be between negative $250 million and negative $300 million.
Speaker Change: We now expect pension income to be approximately $600 million for 2024 up $50 million from our prior guide due to a onetime item that was pushed out from the fourth quarter into 2025.
Speaker Change: This guidance includes repositioning spend between $150 million and $190 million for the year and between 60 and $100 million for the fourth quarter as we invest in high return projects to support future growth and productivity.
Speaker Change: We expect the adjusted effective tax rate to be around 20% for the full year and 17% for the fourth quarter.
Speaker Change: The reduction in expected tax rate is a result of favorable adjustments to income tax contingencies and taxable income mix.
Speaker Change: We anticipate average share count to be around 655 million shares for the full year and around 653 million shares for the fourth quarter and we maintained balance sheet capacity to deploy additional capital to achieve the highest shareholder returns.
Speaker Change: We now expect that the year over year impact to 2020 for adjusted EPS from the four acquisitions closed this year will be approximately neutral.
Speaker Change: Bit better than we communicated last quarter.
Speaker Change: Light delays to the closing of the case in LNG deals reduce some of the interest expense and planned integration costs in 2024, and as we get our arms around the business, we're refining our near term expectations.
Speaker Change: We continue to expect 1% to 2% EPS accretion in 2025 from these deals.
Speaker Change: A summary of the 2020 for M&A impact on our financials is included in the appendix of this presentation.
Speaker Change: As a result of all of these inputs, we expect full year adjusted earnings per share to be in the upper half of our prior range now between $10 and 15.
Speaker Change: To $10 25.
Speaker Change: Up 7% to 8% year on year.
Speaker Change: I think that it's.
Speaker Change: There are a few few comments on my first there are three important backdrops, which are which we also considered for 2025 number one our backlog is up 6% and with all.
All of the acquisition.
Speaker Change: I do believe we have a better quality portfolio and number three our cost position is very robust we have seen that in our margin expansion across all four segments and thats driven by both productivity and our cost control actions. So those are carrying forward for 2025, what we're also executing is our.
Speaker Change: What's in our control, which is driving growth action through new products, but also continue to drive productivity actions to.
Speaker Change: To maintain the higher quality.
Speaker Change: PNM.
Speaker Change: Now that backs our as we mentioned in our comments is we do expect all four segments to have organic growth in 2025, another specialty granges will share that in January when we have the earnings calls, but at this point.
Speaker Change: We feel confident on that fact, we also feel that we also believe we will be back to margin expansion in 2025.
Speaker Change: Based upon the actions <unk> taken so I would say the setup is positive.
Speaker Change: There are there are uncertainty.
Greg Lewis: On the cost position you are absolutely right. We are very watchful on that and we have demonstrated that in Q3 I'm going to pass on to Greg to explain some of the repositioning the numbers what we have reflected on and provide specific commentary on that yeah, yeah. So julien.
Speaker Change: The takedown in the repo guidance is really just the Q3 number.
Greg Lewis: Being lower on the low end of the range. So if you if you look at our guidance for the fourth quarter at $60 million to $100 million. That's roughly the same as what we had implied and so the the take down from 150 to $2 25 to now $1 50 to 190.
Greg Lewis: It's really just the third quarter being on the low end, we have a very robust.
Greg Lewis: Yourself.
Speaker Change: Strike Board yesterday night, which is unfortunate.
Speaker Change: I'd say from a.
Speaker Change: Honeywell perspective, we have been working very closely with Boeing.
Speaker Change: To make sure that we have a coordinated way of dealing with our shipments of the Boeing the net net the punch line of that is.
Speaker Change: Thankfully there is no impact of that into our revenue in Q4, we are adjusting some shipments into aftermarket boeing's customers and so on.
Speaker Change: And we really have been early to start thinking about 2025 based upon how things are shaping up but for Q4.
Speaker Change: There is no there is no specific impact.
Greg Lewis: Our numbers, maybe Greg you want to yes, I can so on on the commercial aftermarket side as you saw US report high single digit growth overall and as Youre Spidey sense is are are telling you it's double digits in <unk>.
Speaker Change: We are in it.
Speaker Change: Single digits, and PGA and again I don't think that should be a surprise to anyone.
Speaker Change: International market continues to expand.
Speaker Change: Expand on flight hours as it has throughout the course of the year.
Speaker Change: We're still outgrowing and VGA the flight hours growth given all of the nice work. The team has done on there or a new portfolio. So that continues to be a positive for us in terms of.
Speaker Change: We're trying to do the decoupled growth approach that we've been so successful at over the years.
Speaker Change: Great. Thanks, that's helpful and just a quick one on the portfolio.
Speaker Change: PPE no surprise, there, but maybe size the breath and margin for PV.
Speaker Change: This year and then I guess the only other thing on the agenda right now is continuum, we still hoping to monetize that next year.
Yes, so the PPE rems or about $1 billion, one we're not going to get into.
Speaker Change: Is that the margin profile you can probably.
Speaker Change: Get close with some of the information.
Speaker Change: <unk> learned overtime and then that's when you'll get 90 days as we have said, we absolutely want to monetize Honeywell investment at the right time.
Speaker Change: Key focus area for us is continuing to make progress on the technical milestone because of that.
Speaker Change: It will feed into commercial and commercial customer acquisition, which will feed into IPO in that order and we are making nice progress on the on the technical front.
Speaker Change: Earlier in the year.
Look with Microsoft approved.
Speaker Change: At our rates in quantum computing, which is a big milestone and we did group one of the highest fidelity.
Speaker Change: <unk> platform.
Speaker Change: Luke.
Speaker Change: Made some announcement on the capability relative to logical cubic's.
Speaker Change: In Q3, so we are making progress on unexpected line on it on the technical front, but it is very very.
Speaker Change: Positive factor to known back enough feed into.
Speaker Change: Not a good news from a customer perspective.
Speaker Change: At the same time, you are carrying forward that backlog next year, which will help us.
Speaker Change: To have very similar profile of growth in 2025, as we are experiencing in Q4 this year. So.
Speaker Change: We remain very positive and optimistic I'm also very excited about the case acquisition, which is going to further expand the profile, it's a meaningful business size $703 million, we do expect high.
Speaker Change: High growth rate in defense segment, which is also going to help in shape 2025 number for arrow on the top line growth.
Speaker Change: Thank you I appreciate that and then maybe kind of <unk>.
Speaker Change: Turning over to industrial automation.
Speaker Change: Ben a.
Speaker Change: A couple of years now of pretty steady meaningful declines and I understand that a lot of these end markets are challenged whether it's warehouse or scanners or even safety and sensing, but when you look at your the honeywell's performance in industrial automation compare to the end markets. You serve do you feel like the company is holding share.
Speaker Change: Or do you think that the company might be losing share or even or maybe even gaining share across these end markets. Thank you.
Speaker Change: Yeah great.
Speaker Change: Uh huh.
Speaker Change: DSO multiple end markets there so I can't give you.
Speaker Change: A very brief and short answer on that.
Speaker Change: On the whole.
Speaker Change: The market drivers are the contributing factors on the performance of the industrial automation business.
Speaker Change: Always exceptions, there, but that really drive that.
Speaker Change: Also bear in mind that this business is extremely global and we look at the end market, but the length of use which we all sit here and thats what we observe.
Speaker Change: A strong presence in Germany. This business has a strong presence in China, and you cannot ignore or some of the economic dynamics going in those parts of the World and then you have material revenue there, it's certainly having an impact.
Speaker Change: I'd say the one liner for that is we are dish.
Speaker Change: Shaping up with the market looking ahead I would say.
Speaker Change: 195.
Speaker Change: The <unk>.
Speaker Change: There are two headwinds we have on 24 are behind US, which makes me believe very very strongly that industrial emissions will grow in 2020 fine. The first headwind will be gone is that rebase signing off being delegated volumes business volume.
Speaker Change: We had mentioned in one of the earlier call.
Speaker Change: The account around $1 billion, that's weighted is shaping up so we don't have that headwind. We do believe we can sustain that volume looking at in 2025.
Speaker Change: We had three quarters.
Speaker Change: Our royalty from zebra in our numbers in 2020, all of which more than appeared in 2025, so from a comps perspective.
Speaker Change: Let me correct that we have only one quarter of.
Speaker Change: This year, so from a comp perspective, its a small number so in 2025, we don't have to deal with that that too so those going away in markets normalizing to a certain degree.
Speaker Change: Even they remain constant we are still going to grow at a very normalized markets today.
Speaker Change: We do expect a positive performance in that business in 2025.
Speaker Change: Thank you.
Speaker Change: Thank you. Our next question comes from the line of Sheila <unk> with Jefferies. Please proceed with your question.
Speaker Change: Thank you so much John and good morning.
Nishu I'll come back here.
Speaker Change: Thank God.
If we could talk about.
Sheila: Can you talk about the right level for how you think about it in Q4.
Sheila: Deceleration keep hold up so far is that.
Sheila: That's not a change in the macro picture the supplier.
Sheila: Supplier of that pop up.
Speaker Change: Sorry, Sheila I think you broke up for a second would you mind restating the question.
Speaker Change: Oh, sorry about that.
Speaker Change: So just on the Max can you give us an idea where you are on Max in Q3 versus Q4.
Speaker Change: And if it is unchanged what results in that Q3 to Q4 margin deceleration of about 250 bps going to around 25%.
Speaker Change: Yes.
Speaker Change: On the Q2 I will answer the second portion the margins Q3 to Q4. It just the drivers of the OEM shipments.
Speaker Change: So some of the discrete manufacturing disruption than we had in Q3 ended up having directly lower OE volume, which helped us in terms of the mix and that drove the margin in Q3, so as those supply chain disruptions that getting released in Q4, those shipments are going to occur, which again pushes the margins too.
Speaker Change: To a different trajectory. So I think that's a fundamental shift.
Chip there.
I think our comments on the Boeing situation is just that their demand on us has not gone down demonstrably from what it had been previously.
Speaker Change: Doesn't mean, there's not some disruption in our ability to ship in Q3 versus Q4, we definitely had that.
Speaker Change: Challenge.
Speaker Change: The demand on us has not changed meaningfully from.
Speaker Change: The last one I would add is just to say that <unk> is better than we would've thought.
Speaker Change: On the margin given that mix and then some reversion in the fourth quarter. So overall in the full year is really unchanged when we communicated previously or just one.
Speaker Change: In which quarter.
Speaker Change: Got it.
Speaker Change: And then hopefully you can hear me on the commercial aftermarket.
Speaker Change: Q3, Atlanta that 8%.
Speaker Change: Maybe we just modeled it wrong, but it seemed like it was mostly <unk>. So when you think about aftermarket being the growth leader in Q4 is that can you double digit in the OTR any color there or is that pgi picking up again.
Speaker Change: In aftermarket.
Speaker Change: The aftermarket will be stronger in ATR than PGA. That's just that's going to continue to be that way for some period of time.
Speaker Change: Got it thank you.
Speaker Change: Thanks Sheila.
Speaker Change: Thank you. Our next question comes from the line of Deane Dray with RBC capital markets. Please proceed with your question.
Deane Dray: Thank you good morning, everyone.
Speaker Change: Hey, Deane.
Deane Dray: Hey, I think it was just about a year ago that you did the re segmentation.
Deane Dray: And one of the outcomes was you identify that there was roughly 10% of revenues that would be divested maybe half of them chunky, others kind of very small below the radar screen. So does PPE would that be part of it.
Speaker Change: And I would trust advanced materials is not part of that 10%. So just whats the pipeline look like.
Speaker Change: Yes.
Speaker Change: When we announced it last year this time.
Speaker Change: It was an initial view of the portfolio, which had less rate relative to the three mega trends.
Speaker Change: There were portions of advanced materials, which were part of it but when we did the work.
Speaker Change: Shareholder value was much higher for the whole spin versus the smaller part, which make us its decision off announcing the spin.
Speaker Change: A few weeks back so that was definitely part of the parameter and a smaller scope, but ended up being big PPE was part of that scope.
Speaker Change: So I would say on our broader strategy basis, we are directionally dawn for the near term, but portfolio work is never complete.
Speaker Change: There are we are constantly want to look at what else is a net straight and Honeywell now, even though everything fits into either future of aviation energy transition. Our automation now the question I'm asking is relative to the growth rates and margin expansion runway and vertical freight and things of that nature and welcome.
Speaker Change: Instantly make our portfolio.
Speaker Change: Active portfolio management as part of our.
Speaker Change: Operating system, we have a lot of balance sheet capacity we.
Speaker Change: Certainly want to use that in the bridge that to the benefit of.
Speaker Change: Building a better business.
Speaker Change: So those are those are some of the comments on an operator.
Speaker Change: What would be the timeframe for other divestitures.
Speaker Change: I won't.
Speaker Change: Let's say.
Speaker Change: I won't put a specific timelines here I would say that we want to be prudent and utilization of our balance sheet capability and the events will be more determined by the opportunity set the opportunity set of acquisitions.
Speaker Change: And similarly, the fit is less we need to get convicted we have to do that wrong and then really start working on <unk>.
Speaker Change: Some of the Boston portfolio actions there. So there's nothing new definitive which we are working on but you never say never because this is a constant activity.
Speaker Change: Thank you.
Speaker Change: Thank you. Our next question comes from the line of Joe Ritchie with Goldman Sachs. Please proceed with your question.
Joe Ritchie: Hey, good morning, guys.
Speaker Change: Hi, Joe.
Joe Ritchie: Could you I may have missed it but can you Ron can you. Please elaborate on the project delays that you are experiencing in both process solutions and <unk> what are the root causes and then how do you see that rectifying going forward.
Joe Ritchie: So still I would say the conversion rates typically BC.
Joe Ritchie: We ended up doing approximately 50% of our revenue in month three of every quarter and we have a.
Joe Ritchie: Well proven run rate of conversion of <unk>.
Joe Ritchie: Smaller projects both in process solution and.
Joe Ritchie: Smaller.
Joe Ritchie: <unk> catalyst shipments and Thats, what really did occur on a normal run rate in Q3. So that's what we observed for the first time that push ourselves happening.
Joe Ritchie: At this point of time.
Joe Ritchie: At the same time I'll also give you another data point <unk> had at historic high in its history order booking in the same quarter $1 billion.
Joe Ritchie: Which are large new projects people are committed investment for new new promise.
Joe Ritchie: Our process technology, our new recruitment. So those are the dynamics going on the long cycle commitment continue to hold that.
Joe Ritchie: Shar cycle Pushups I'll also occurring at the same time and we have factored that into our Q4 earnings forecast now that we expect that some of those project push outs will continue to occur to be say stability and probably the root cause of that.
Joe Ritchie: And back to two factors.
Joe Ritchie: Say theres a lot of uncertainty and would lead to our situation in oil price fluctuation. We all observe there and we are all are eagerly awaiting on outcome of U S. Elections, So I think that uncertainty causes making any moderate investment also.
Joe Ritchie: Bit of a concentration for our customers.
Joe Ritchie: That's that's driving the push out and we do expect as things settle some of these.
Joe Ritchie: Should become back to the normal case.
Joe Ritchie: Ed.
Speaker Change: Got it that's helpful said, most thesis is basically exogenous factors not not anything internal that's impacting <unk>.
Speaker Change: Okay, Alright, and then I guess, maybe yeah.
Speaker Change: And then and then the second question is just lift the defense business has been.
Speaker Change: I think double digits now for four out of the last five quarters and recognize that youre benefiting from the fact that supply chain is normalizing I guess, how do we how do we think about that.
Speaker Change: Into 2025, and that's a business just based on the normalization of supply chain and should continue to see this level of growth you know call. It high single digits double digit type growth into next year.
Speaker Change: Yes, I do believe that I think of our order books. There are strong in defence and in fact, the bond remains very strong we have demonstrated now for two quarters in a row, our ability to take supply chain actions, specifically the defense supply chain.
And we do expect to maintain this momentum in 2025 it will remain.
Speaker Change: The headline for aerospace growth, specifically not only the core business and you will always own but with the acquisition of case, which is the entirely serves defense segment of our near term mix of defense that is going to go up.
Speaker Change: And growth rates are going to be at.
Speaker Change: I would say the literally elevated rate compared to the core aerospace business.
Speaker Change: Okay, great. Thank you very much.
Speaker Change: Thank you.
Speaker Change: Thank you. Our final question. This morning comes from the line of Andy Kaplowitz with Citigroup. Please proceed with your question.
Speaker Change: Hey, good morning, everyone.
Speaker Change: And again Andy.
Andy Kaplowitz: So you've talked about accelerating new products now in evolving the accelerated operating system, how much could that accelerating or maybe the focus on what good looks like across your portfolio, helping twenty-five versus 'twenty. Four would you anticipate a material step up in core growth from your initiatives, even if markets maybe stay a little muted more muted than expected outside of Aero.
Speaker Change: Yes, I think short answer is yes, Andy we have done work and we really track what I call new product category. So fundamentally what we have all of our operating system is.
Speaker Change: Think about the product the core product, which we always have and refreshing them because we have to keep share you can keep them scale, and then adding new product categories, which we don't have today those SKU numbers don't exist in our ERP system and that.
Speaker Change: Those products, which are being launched in 2004 early 25, I'm going to be a larger number compared to what we had in 2000 and for run rate. So that does give me a confidence that thats going to act as an enabler for us to deliver our growth in 2025.
Speaker Change: Specific to share when.
Speaker Change: When we do the earnings call, but fundamentals do look attractive on that space.
Speaker Change: Got it and then maybe just a little more color on what Youre seeing in terms of the landscape by geography, it's interesting to see that buildings products has started to improve is that a function of European building products getting any better and I know you mentioned some macro headwinds in China. Obviously, so what are you seeing out there.
Speaker Change: I would say.
Speaker Change: In pockets I mean, if you call specifically on the buildings business.
Speaker Change: We did observe.
Speaker Change: Good recovery in Europe.
Speaker Change: Our short cycle businesses and building automation.
Speaker Change: I would say we have crossed that trough in Europe, and we are on a moderate recovery. There, we certainly see that in China I would say that's not true.
Speaker Change: Honeywell continues to be in mid to high single, we have said before we will perform well in China. Thanks to our aerospace and energy segment, but our automation businesses are flat to slight contraction. We are not observing any change in trajectory, which then get reflects on.
Speaker Change: The performance there so some pockets of recovery in Europe.
Speaker Change: Not so much in China and headline of our growth, which we mentioned in our prepared remarks also we do see strong growth in India, and Saudi Arabia. Those two countries are become catalyst of our growth we have.
Speaker Change: Moderate number of amount of revenue there so suddenly double digit revenue growth 70 hubs on our topline.
Speaker Change: Appreciate all the color.
Speaker Change: Thank you.
Speaker Change: Thank you. This concludes our question and answer session. Mr. <unk> I'll turn the floor back to you for any final comments.
Speaker Change: I want to express my thanks to our shareholders for your support and to the Honeywell future shape, our who will help us to achieve our accelerated growth goals I believe our future is bright and we look forward to updating you on our progress. Thank you for listening and please stay safe and healthy.
Speaker Change: Thank you. This concludes today's conference call you may disconnect. Your lines at this time. Thank you for your participation.