Honeywell Turbo Technologies
Honeywell Turbo Technologies
Rob Gillette President and CEO Transportation Systems Forward Looking Statements
These materials contain certain statements that may be deemed “forward- looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical fact, that address activities, events or developments that we or our management intends, expects, projects, believes or anticipates will or may occur in the future are forward-looking statements. Such statements are based upon certain assumptions and assessments made by our management in light of their experience and their perception of historical trends, current conditions, expected future developments and other factors they believe to be appropriate. The forward-looking statements included in these materials are also subject to a number of material risks and uncertainties, including but not limited to economic, competitive, governmental, and technological factors affecting our operations, markets, products, services and prices. Such forward-looking statements are not guarantees of future performance, and actual results, developments and business decisions may differ from those envisaged by such forward-looking statements.
Scottsdale, AZ Dec. 2004 Page 2 Today’s Review
• Transportation Systems
• Turbo Technologies Overview
• Ride & Drive Preview
• Ride & Drive
Scottsdale, AZ Dec. 2004 Page 3 Honeywell Today
Aerospace Automation
38% 32%
16% 14%
Specialty Transportation Materials
• 108,000 employees in nearly 100 countries • A Fortune 60 company – $25 billion in sales • One of 30 select companies in the DJIA
Scottsdale, AZ Dec. 2004 Page 4 Transportation Systems
ProfileProfile 2004E Revenue: $4.2 - 4.3B 13 - 14% Op. Margin
StrengthsStrengths:: • Turbo Technology • Strong Brands • Global Presence • Installed Base
TurboTurbo TechnologiesTechnologies ConsumerConsumer ProductsProducts GroupGroup FrictionFriction MaterialsMaterials 51%51% 28%28% 21%21%
Strong Growth Driven By Turbo Technology
Scottsdale, AZ Dec. 2004 Page 5 Turbo Technologies
Sales by Sales Turbo Volume Region by Segment in millions
15.8% CAGR Europe 9.1 Comm’lOE 7.2 64% Diesel85% 6.3 33% 4.7 Passenger Americas Vehicles 2.7 Asia 2.1 22% 12% 67%
. 1994 1996 1998 2000 2002 2004E
• $2.4 billion in sales (est 2004) • Leader in technology and innovation • Aerospace heritage and synergy
Global Leader in Engine Boosting Scottsdale, AZ Dec. 2004 Page 6 What is Turbocharging?
Compressed
Air Flow
Engine Cylinder Charge Air Cooler Turbine Compressor Engine EGR Cooler Gas Discharge
Ambient Air Inlet
Engine Exhaust Gas
• Turbine driven compressor • Propelled by engine exhaust gas • Increases air flow and density Increases Power Density Scottsdale, AZ Dec. 2004 Page 7 Boosting Opportunity
Turbocharged Segment Boosted/Non-Boosted Vehicles (Million) 24.7 25 10% CAGR BMW
15.5 Hyundai Significant Boosting Peugeot Opportunity DaimlerChrysler 0 ’04 ’09 Volkswagen
Overall Auto Market Renault-Nissan (Million) 71.8 Toyota 75 63.5 2.5% CAGR Boosted Ford Non-Boosted 63% Gas 67% GM 4% Other 3% 0 2 4 6 8 10 12 33% Diesel 30% Comm’l Vehicles 0 ’04 ’09 Volumes (Millions)
Source: Power System Research Untapped Opportunity for Turbocharging
Scottsdale, AZ Dec. 2004 Page 8 Turbo Applications
• Heavy Duty • Light Trucks • Passenger Cars
Fuel Economy, Emissions and Performance
Scottsdale, AZ Dec. 2004 Page 9 Why Turbocharge? Turbo Benefits
TurboTurbo DieselDiesel TurboTurbo GasolineGasoline Great driving experience 10 - 20% better mileage with 30 - 50% better compared to non-boosted mileage than gasoline engines with equal or better vehicles performance
Performance and Fuel Economy
Scottsdale, AZ Dec. 2004 Page 11 Turbo Benefits - A Comparison
EuropeanEuropean VWVW GolfGolf Acceleration Fuel Consumption
0-60 miles in seconds (city 45%, highway 55%)
MPG Seconds
50 45.9 12 10.6 45 10 8.8 8.6 40 35 8 7.2 28.3 30 25.7 26.4 6 25 20 4 15 2 10 5 0 0 2.3L I5 1.8T 1.9TDI 2.0 2.3L I5 1.8T 1.9TDI 2.0
Source: Auto Motor und Sport; Car and Driver Fun to Drive and Fuel Efficient
Scottsdale, AZ Dec. 2004 Page 12 Turbo Benefits - “The Turbo Effect”
TurboTurbo DieselDiesel TurboTurbo GasolineGasoline
Engine HP 0-60 Fuel Economy Engine HP Torque Fuel Economy city/highway city/highway
VW Golf 150 8.8 sec 18/32 BMW 325 184 175 19/27 2.3L I5 Gas 2.8L NA VW Golf 150 8.6 sec 33/54 Saab 9.3 205 209 23/33 1.9L I4 TDI 2 L Turbo
“Turbo _ .2 sec +83% / +69% “Turbo +11% +19% +21% / +22% Effect” Effect”
Source: VW Turbochargers Enable Performance and Fuel Economy
Scottsdale, AZ Dec. 2004 Page 13 Why Now? Legislation Converging
European CO Reduction Objectives 180 2 165g/km
160 140g/km
[g/km] 140 2 120g/km
CO 120 -15% -27% 100 2002 2008 2012 NOx & Particulates
PM Japan PM Europe PM US [g/Km] [g/Km] [g/Km] 0.10 0.10 0.10 Japan 2000 Euro II (1996)
Tier I (1994) Euro III (2001) 0.05 0.05 0.05
Japan 2005 Euro IV (2005) Tier II (2004) Euro V (2010) Tier III (2007)
NOx (g/Km) Nox (g/km) 0.0 0.5 0.8 NOx (g/Km) 0.0 0.5 0.8 0.0 0.5 0.8 Increasing Requirement For Clean Technologies Scottsdale, AZ Dec. 2004 Page 15 Global Engine Downsizing Trend
WW Average (Passenger Car and Light Truck)
Size, Weight, Engine Size Europe Asia US Performance (Liter) (Hp) Avg. Displacement 1.9L 1.8L 3.6L 180 5.0 Avg. Horsepower 72Hp/L 71Hp/L 58Hp/L 170 152 Hp 160 4.0 • Average engine size decreases 3.0 L 150 +18% globally (except in the US) 3.0 140 • Average engine Hp increases 2.5 L 130 Increased engine power density in 129 Hp • 120 2.0 -16% Europe and Asia 110
1.0 100 1990 2000+
Boosting / Turbo is a Key Enabler
Scottsdale, AZ Dec. 2004 Page 16 Diesel - Our Foundation for Growth
Diesel Penetration Over 20 Years 70 % Korea: 62% 60 % Europe: 56% 50 %
40 %
30 % China: 20 % 22%
10 % US: 7% 0 % 90 92 94 96 98 00 02 04 06 08 10 VNT™ for AVNT™ for light and Double Axle VNT™ for Passenger Car medium duty trucks heavy duty trucks Latest Generation Debuted in 2005 BMW 120D
Diesel Penetration Continues to Increase Worldwide Scottsdale, AZ Dec. 2004 Page 17 Modern Clean Diesel
Before Now
• Old technologies • New technologies Polluting, dirty – Common rail fuel injection, Variable • injection timing, VNT™ technology – Particulate matter (PM) – Nitrogen dioxides (NOx) • Environmentally friendly – Sulfur fuel – 83% PM reduction since 1988 – 63% NOx reduction since 1988 Consumer rejection • – Ultra low sulfur fuel available in 2006 – Bad impression – Unsatisfactory performance • Increasing consumer acceptance – Superior performance and no turbo lag – 1/3 of Americans would consider purchasing a clean diesel vehicle*. * J.D Powers & Associates New Diesel Technology Drives Consumer Acceptance Scottsdale, AZ Dec. 2004 Page 18 North America Heavy Duty Truck Segment
Heavy Duty Truck Shipments 300
200
100 Volumes (000)
0 '01 '02 '03 '04 '05 '06
Source: WARD’s Communications & ACT Research
• Strong growth driven by economic recovery • Variable geometry needed to meet US emissions requirements • “Pre-buy” cycle boosts shipments through 2006
Technology and Strong Market Drive Growth
Scottsdale, AZ Dec. 2004 Page 19 US Dieselization
US Diesel Growth
1800 PV 1600 LT < 8500 3% Penetration 1400 LT > 8500 *New 1200 Growth 1000 800 8% Penetration 600 Existing 400 Market Diesel Sales (K Units) (K Sales Diesel 200 75% Penetration LT>8500 0 2004 2005 2006 2007 2008 2009 2010
*Domestics + Imports
• Ability to charge a premium in premium car and light truck/SUV • Real world fuel economy meets expectations • Efficiency without compromising performance • Torque benefit for larger vehicles • Strong vehicle residual values
Diesel Now Associated with Ultimate Driveability
Scottsdale, AZ Dec. 2004 Page 20 Gasoline - Growing Interest Worldwide 9 8 Global Turbo Gasoline Segment 8M Turbo 7 (20% of gas engines) 6 5 3.4M Turbo 5M Turbo 4 (12% of gas engines) 1.6M Turbo 3 Million Units Million 2 1 0 ’01 ’03 ’08 ’10 Source: PRI, PSR, Martec Future Direction
Wastegate Variable Geometry Technology Breakthrough will Lift Gas Turbo Adoption
Scottsdale, AZ Dec. 2004 Page 21 Asia Growth
Overall Boosting Demand China (Units) • Light duty truck growth CAGR • Adoption of Euro II standards 13% 6M • Fuel consumption regulations to be 3.3M increased 15% by 2010 Japan
2003 2008 • Strong overseas growth in diesel • Gasoline boosting opportunity driven Honeywell Turbo Forecast by CO2 regs beyond ‘08 (Units) • New long-term emission standard CAGR from 2H/05 18% 3M Korea
1.3M • Continued increase in passenger car diesel adoption • Tax incentives fuel diesel growth 2003 2008 Diesel Adoption, Emissions Drive Growth Scottsdale, AZ Dec. 2004 Page 22 India
Turbodiesel Vehicle Production Honeywell Turbo in India
600 501K 500 03-08 CAGR • Business won with Tata and 400 28% Mahindra 300 • Developing facility in Pune 200 143K • 300K unit volume opportunity 100
0 2003 2008 Commercial Vehicles Light Vehicles
• Favorable fuel price differential • 2005 Euro III implementation • Focus on export market • Euro IV favors VNT technology Fast Growing Diesel Segment
Scottsdale, AZ Dec. 2004 Page 23 Why Honeywell? Technology Evolution
Step Change: Control and Response Step Change: e-Turbo™ Compressor Electrically Side Assisted Turbo
Variable Geometry 2-Stage Compressor Turbos Turbos Performance Step Change: Turbine Side Step 3 Step 2 Step 1 VNT™ Variable Nozzle Turbine Wastegate Entering Market 2004 2008 Robust Technology Roadmap
Scottsdale, AZ Dec. 2004 Page 25 Latest Generation VNT
Simulated Torque Curve
Variable Nozzle Turbo (VNT™)
Wastegate
Naturally Aspirated Engine Torque
1000 2000 3000 4000 Engine RPM
• Improved power • Lower fuel consumption and emissions • Higher torque and improved transient response • Improved braking power Continued Improvement of Groundbreaking Technology
Scottsdale, AZ Dec. 2004 Page 26 Two-Stage Turbo
Simulated Torque Curve
2-Stage VNT™
Wastegate
Naturally Aspirated Engine Torque
1000 2000 3000 4000 Engine RPM
• Employs twin turbos to boost low- and high-end performance
• Significantly increases power density of engine
• Higher power, transient response Increasing Performance Through Staged Boosting
Scottsdale, AZ Dec. 2004 Page 27 Variable Geometry Compressor
Turbine Compressor Variable Geometry Simulated Torque Curve Compressor VGC VNT™
Wastegate
Naturally Aspirated Engine Torque
1000 2000 3000 4000 Engine RPM
• Applies variable geometry to compressor side of turbo
• Wider flow range increases efficiencies
• Can be used on full engine range Moving From Turbine to Compressor Side
Scottsdale, AZ Dec. 2004 Page 28 Electric Boosting
Electric Motor Simulated Torque Curve
E-Boost VNT™
Wastegate
Naturally Aspirated Engine Torque
1000 2000 3000 4000 Engine RPM
• Employs electric motor to eliminate turbo lag
• Full integration with engine management system
• Complements hybrid engines and fuel cells Provides “Boost on Demand”
Scottsdale, AZ Dec. 2004 Page 29 Hybrid Technology
• Fuel-economy most pronounced during stop/start driving
• Variety of hybrids exist; all rely on internal combustion engine – Most fuel efficient version would be turbodiesel-hybrid
• Niche vehicle or mainstream technology? – Hybrid penetration in Japan less than 5% after many years – Cost/benefits analysis on hybrids vs turbodiesel still unclear – Mature adoption of turbodiesel to limit European penetration
Hybrid Cost/Benefits Unclear
Scottsdale, AZ Dec. 2004 Page 30 Diesel versus Hybrid
Escape Hybrid vs. Jeep Liberty Diesel Price ($000s) TD H 20 30 TD H 0-60 mph (seconds) TD Escape Hybrid H Liberty Diesel 8 12
Towing Capacity (lbs.) H TD 1000 5000
2.8L I4 Diesel 2.3L I4 Hybrid City Fuel Economy (US mpg) TD H 20 40
Highway Fuel Economy (US mpg) TD H 20 40
Source: Corporate Information, Car & Driver, AutoSite, Wards Communications TD Diesel Offers Superior Value for LT/SUV Scottsdale, AZ Dec. 2004 Page 31 Honeywell Competitive Advantage
People/Expertise • Aerodynamics • Mechanical wheel design (HCF, optimization) • Reliability build up • Cooling optimization/material
Technology • Air bearings • High temperature alloys • Coatings • Assembly/welding
Markets • Automotive controls • Electronics • Power generation
Honeywell Technology Applied to Turbo Scottsdale, AZ Dec. 2004 Page 32 Global Footprint
Skelmersdale, UK Cheadle, UK Birmingham, UK Kodama, Japan Birmingham, UK
Morges, Switzerland Waterford, Switzerland Torrance, CA Detroit, MI IrelandIreland Seoul, Korea Thaon-les-Vosges, Bucharest, France Romania Mexicali Atessa, Italy Shanghai
Pune, India
Sao Paulo, BrazilBrazil Headquarters R&D Center Manufacturing
Broad and Diverse Resources Scottsdale, AZ Dec. 2004 Page 33 Turbo Productivity Engine
Percent of Cost of Goods Sold
Emerging Emerging Regions High Cost High Cost Regions 38% 46% 62% 54%
2004 2009
• Manufacturing/supply base transitioning to emerging regions – Most incremental new volume in Bucharest, Mexicali and Shanghai • Focus on our core competencies, outsource the rest – More than 60% of cost is materials: supply base drives productivity • Lean initiatives ensure maximum shop floor utilization Supporting Worldwide Growth
Scottsdale, AZ Dec. 2004 Page 34 Summary
• Why Turbocharge? - Optimizes engine performance - Fuel economy - Emissions reduction
• Why Now? - Legislative mandates - Worldwide diesel and gasoline market demand - Recent technological advances
• Why Honeywell? - Technology leader - Expertise, competitive advantage - Global presence and customer base Enjoy the Ride!
Scottsdale, AZ Dec. 2004 Page 35 Why Wait?
Here’s a look at the vehicles you’ll be driving! Ford Falcon (Australia)
4.0L DOHC Gas Turbo I6 24V DOHC
322 hp @ 5250 rpm 6.2 s 0-62 mph 332 lb.-ft @ 2000 to 4500 rpm 21 / 28 mpg (AUS)
Scottsdale, AZ Dec. 2004 Page 37 Ford Falcon (Australia)
4.0L DOHC Gas Turbo I6 24V DOHC
322 hp @ 5250 rpm 6.2 s 0-62 mph 332 lb.-ft @ 2000 to 4500 rpm 21 / 28 mpg (AUS)
Scottsdale, AZ Dec. 2004 Page 38 Ford Focus RS (England)
2.0L Gas Turbo I4 16V DOHC
211 hp @ 5500 rpm 6.4s 0-60 mph 229 lb.-ft @ 3500 rpm 20/37 mpg (Euro)
Scottsdale, AZ Dec. 2004 Page 39 Volkswagen Parati (Brazil)
1.0L Gas Turbo I4 16V DOHC
110 hp @ 5500 rpm 9.8 s 0-62 mph 114 hp @ 2000 rpm 27/39 mpg (Brazilian)
Scottsdale, AZ Dec. 2004 Page 40 Jeep Liberty I4T (Honeywell prototype)
2.4L Gas Turbo I4 16V DOHC
241 hp 9 s 0-60 mph 243 lb.-ft 18/24 mpg
Scottsdale, AZ Dec. 2004 Page 41 Smart Roadster
700 cc Gas Turbo L3 SOHC
80 hp @ 5250 rpm 10.9s 0-62 mph 81 lbs.-ft. @ 3000 rpm 37/53 mpg (Euro)
Scottsdale, AZ Dec. 2004 Page 42 BMW 530d
3.0L Turbo Diesel I6 24V DOHC
218 hp @ 4000 rpm 7.1 0-62 mph 368 lb.-ft @ 1750 rpm 25 / 43 mpg (Euro)
Scottsdale, AZ Dec. 2004 Page 43 Volkswagen Passat TDI
2.5L Turbo Diesel V6 24V DOHC
180 hp @ 4000 rpm 9.6 0-62 mph 279 lb.-ft @ 1500 rpm 19/37 mpg
Scottsdale, AZ Dec. 2004 Page 44 Mercedes Benz E 320 CDI
3.2L Turbo Diesel V6 24V DOHC
218 hp @ 4000 rpm 7.7 0-62 mph 368 lb.-ft @ 1750 rpm 27/37 mpg
Scottsdale, AZ Dec. 2004 Page 45 Smart City-Coupe CDI
0.8L Turbo Diesel I-3 6V SOHC
40 hp @ 4200 rpm 15.4 0-62 mph 74 lb.-ft @ 1800-2800 rpm 60 / 75 mpg (Euro)
Scottsdale, AZ Dec. 2004 Page 46 VW Touareg
5.0L Turbo Diesel V10 5.0l DOHC
313 hp @ 3750 rpm 6.2s 0-60 mph 552 lb.-ft @ 2000 rpm 17/23 mpg
Scottsdale, AZ Dec. 2004 Page 47 Questions
Scottsdale, AZ Dec. 2004 Page 48