Honeywell 2009 Annual Report Download - page 45

increased in 2009. Decreased orders are primarily due to the unfavorable impact of foreign exchange,
softening demand (as noted above) and order timing and delays. Higher backlog is primarily due to longer
duration projects. The impact of these factors was partially offset by the positive impact of acquisitions, most
significantly the RMG Group.
ACS segment profit decreased by 2 percent in 2009 compared with 2008 principally due to the negative
impact of lower sales as a result of the factors discussed above and inflation, partially offset by lower material
costs, reduced labor costs (reflecting reduced census, work schedule reductions, benefits from prior repositioning
actions and lower incentive compensation) and the positive impact of indirect cost savings initiatives. In the fourth
quarter of 2009 these factors more than offset the impact of lower sales described above resulting in a 5 percent
increase in segment profit.
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.
•
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.
2010 Areas of Focus
ACS's primary areas of focus for 2010 include:
• Products and solutions for energy efficiency and asset management;
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Extending technology leadership: lowest total installed cost and integrated product solutions;
•
Defending and extending our installed base through customer productivity and globalization;
•
Sustaining strong brand recognition through our brand and channel management;
•
Centralization and standardization of global software development capabilities;
•
Continuing to identify, execute and integrate acquisitions in or adjacent to the markets which we serve;
•
Continuing to establish and grow emerging markets presence and capability;
•
Continuing to invest in new product development and introductions; and
•
Continued deployment of our common ERP system.
Specialty Materials
Overview
Specialty Materials develops and manufactures high-purity, high-quality and high-performance chemicals
and materials for applications in the refining, petrochemical, automotive, healthcare, agricultural, packaging,
refrigeration, appliance, housing, semiconductor, wax and adhesives