Global Top 10: Honeywell on hitting targets
Global Top 50 rank: 9
US Top 100 rank in 2015: 5
IR Magazine Awards won in 2015: 1
IR team size: 4
‘Honeywell is one of the only companies in its peer group to issue and achieve five-year targets for sales and segment margins for the total company and each strategic business unit,’ states Mark Macaluso, vice president of IR, when asked what makes Honeywell shine among competitors. ‘Our first five-year plan issued in 2010 was viewed as aggressive, with many investors believing it represented ‘stretch’ goals for the company.
‘It was our job to help both the buy side and sell side understand our vision and why we believed these targets were achievable. When we largely hit all of our goals for the first five-year plan, ending in 2014, investors gained further confidence that Honeywell was a terrific long-term buy-and-hold stock.’
And that wasn’t necessarily an easy thing to do: Honeywell is a ‘$40 bn, highly diverse and global company’ that Macaluso and his team must help investors understand. Their ability to do that, and to issue long-term guidance and then meet those targets, ‘makes what we do in IR unique,’ he says. His team also held 23 roadshows across roughly 30 days over the year and attended 270 investor meetings to help get the story across. Senior management put in time too: 90 days dedicated to IR and attendance at around 120 one-on-ones.
As Honeywell reached the end of its last five-year plan, it put a focus on expanding its international investor base. Two new IR roles were created in 2014: an IR position in China – a high-growth region for the company – and a finance/IR resource in India that is shared with the corporate finance team there.
Honeywell’s high-growth regions will continue to be of importance in 2016, says Macaluso, also mentioning the Middle East as an area of interest. The challenge for the coming year, he says, is reaching the right investors in those regions, as well as ‘providing access to management and explaining to our shareowners why our business and culture in these regions is different from our peers.’