Honeywell 2008 Annual Report Download - page 44

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Changes to energy, fire, security, health care, safety and environmental concerns and regulations.
Results of Operations
2008 2007 2006
(Dollars in millions)
Net sales $ 14,018 $ 12,478 $ 11,020
% change compared with prior year 12% 13%
Segment profit $ 1,622 $ 1,405 $ 1,223
% change compared with prior year 15% 15%
2008 compared with 2007
ACS sales increased by 12 percent in 2008 compared with 2007, including 10 percent net growth from
acquisitions and divestitures. Although foreign exchange had minimal impact on full year sales, there was a 9
percent negative impact of foreign exchange on fourth quarter sales.
• Sales in our Products businesses grew by 15 percent, including (i) the positive impact of acquisitions, most
significantly Norcross Safety Products, Metrologic Instruments, Hand Held Products Inc and Maxon
Corporation, (ii) continued strong demand for life safety products, particularly fire systems and sensors and
(iii) increased sales of our environmental and combustion products, driven by new products and demand for
energy efficient controls, including growth across all regions. These factors were partially offset by
decreases in sales volumes of our security (reflecting U.S. and European residential construction softness)
and sensing and controls products (most notably automotive customers), reflecting softness in the U.S. and
Europe.
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Sales in our Solutions businesses increased by 8 percent primarily due to (i) volume growth, driven by
continued orders growth and strong conversion to sales from our orders backlog and (ii) the positive impact
of acquisitions, most significantly Enraf Holding B.V.
ACS segment profit increased by 15 percent in 2008 compared with 2007 principally due to increased
productivity savings, acquisitions, and improved pricing, partially offset by inflation.
2007 compared with 2006
ACS sales increased by 13 percent in 2007 compared with 2006, including 4 percent favorable impact of
foreign exchange and net growth from acquisitions and divestitures of 2 percent.
• Sales in our Products businesses grew by 11 percent, driven by (i) increased sales of security products
primarily due to growth in intrusion products, European distribution sales and emerging markets, (ii)
continued strong demand for life safety products and (iii) introduction of new environmental and combustion
control products.
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Sales in our Solutions businesses increased by 17 percent with growth in all regions, driven by energy
retrofit and refining services projects, global infrastructure expansion, continued growth in orders and
conversion to sales from our order backlog, as well as the favorable impact of foreign exchange.
ACS segment profit increased by 15 percent in 2007 compared with 2006 principally due to increased
Products and Solutions sales volume and productivity savings, partially offset by inflation. We continue to
experience a change in mix resulting from stronger sales growth in our Solutions businesses that historically have
lower margins than our Products businesses.
2009 Areas of Focus
ACS's primary areas of focus for 2009 include:
• Extending technology leadership: lowest total installed cost and integrated product solutions;
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Defending and extending our installed base through customer productivity and globalization;