Honeywell Welcome and Industry Perspective. Andrew Hird. Vice President Global Sales Honeywell Process Solutions

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2 Honeywell Welcome and Industry Perspective Andrew Hird Vice President Global Sales Honeywell Process Solutions

3 25 Years of Pacific HUG Early 90s TDC 3000 and Total Plant

4 25 Years of Pacific HUG 2000s Experion, FTE and Open Systems

5 25 Years of Pacific HUG Experion Orion, Collaboration, Universal IO and Knowledge Center

6 Andrew Hird Chemical Engineer Specialized in Process Control Customer of Honeywell 10 years with Process Solutions 10 years with Honeywell Process Solutions Vice President Global Sales Vice President Sales Asia Pacific Director - Global Marketing and Strategy General Manager Pulp and Paper - Global General Manager Pulp and Paper - APAC Sales Manager - Pacific Southern Region

7 Organizational Realignment Aligning to Deliver More Value to Our Customers Performance Materials & Technology Process Solutions Universal Oil Products (UOP) Advanced Materials

8 Agenda Market Trends CapEx Shifts Project Cost Escalation Implications for Automation Industry

9 Global Industrial CapEx Trends China and Americas Still Growing; Recovery in Europe & Middle East, Asia Pacific China 2013 CapEx ($B) $1,114 Growth Growth % 6% China investing in Power, Chemical, Mining North American Oil & Gas Growth Americas $800 5% 6% European recovery - North Sea investment EMEA $700 1% 7% Middle East - Energy and Chemicals Rest of APAC $482 Total: $3,100B -3% 7% Asia - recession in India and Japan, forecasted to grow in Power, Metals & Mining, and Oil & Gas

10 Asia Pacific Industrial CapEx Trends China dominates spend but growth moderates; Growth picks up in India, North Asia, and SEA China Japan Pacific India SEA S.Korea 2013 CapEx ($B) $1,114 $117 $111 $110 $100 $44 Total: $1,600B Growth Growth % 6% -9% 4% 1% 2% -5% 12% 3% 8% 3% 9% China investing domestically and abroad, however the growth rate will moderate Japan & Korea #1,2 LNG importers Pacific region dominated by Metals & Mining and LNG production, however, global softness in Mining hurting Australia growth India recovery led by Power and Metals & Mining SEA; Bulk of spend in Oil &Gas, Power, and Metals & Mining

11 Asia Pacific Industrial CapEx Trends Major Verticals with large CapEx: Power, Mining, Minerals & Metals, and Batch Pulp & Paper 2013 Vertical CapEx Split Power 3% Mining, Minerals & Metals 23% 27% Refining 3% 12% 24% Chemicals 8% Oil &Gas Batch (Pharma, Spec. Chem, F&B) Australia expected to become the world s largest LNG producer & exporter by 2017, but high costs could inhibit a new wave of projects post 2018 Refining: China, India, SEA to add new capacity Consolidations continue in Japan & Australia Power: Asia Middle class and Industry set to grow over the long term driving electricity consumption Rise of living standards in developing Asia are driving growth in Specialty Chemicals, Pharmaceuticals, and Food & Beverage China s cooling economy forcing Australian miners to scale back their investments in the short term

12 Pacific Automation Spend Growth Trend Continued Oil & Gas Growth and deferred Investments in Mining, Minerals & Metals Pacific Automation Spend ($B) Power Mining, Minerals & Metals Oil & Gas Existing Installed Base OPEX Spend Pause in Mining investments due to commodity price declines and cost overruns Gas projects coming on-line however future projects under increased CapEx scrutiny High AUD has put a lot of pressure on domestic manufacturing sector to remain competitive

13 Concerns with Large CapEx Projects Cost ($) Cost Over-runs Project scale and complexity Multiple partners Late changes Historical Project Business Case New Mega Project Business Case Actuals: Slower Start, Late Acceleration and Overruns Time (months) Further challenged by Skilled operator scarcity Remoteness of new locations Cyber security

14 Agenda Market Trends CapEx Shifts Project Cost Escalation Implications for Automation Industry

15 Lean Execution for Automation Projects - LEAP Challenges the traditional way projects have been implemented. Utilises three new enabling technologies to revolutionize project execution Universal Channel Technology, Virtualization, and Cloud Engineering. Drastically improves the overall project schedule, keeping automation off the critical path.

16 Bring Universality to Industrial Automation Multiple IO, Single Function Universal IO Transformed by a single device with multiple functions

17 Leveraging Cloud Engineering Traditional Lean Execution Bring the people to the project Bring the project to the people

18 Connecting LEAP to the Control Room Honeywell Experion Orion Console Intuitive, easy to use Mobile station to reduce operator fatigue Voice-enabled Interactive collaboration Prioritized alarm management Designed to Dramatically Improve Operator Experience

19 Connecting LEAP to the Field Robust Pipeline of NEW Innovative Field Products

20 Applying LEAP in HPS and with Customers Internal Honeywell Projects 200+ Honeywell projects using our virtual engineering platforms and cloud engineering No repeat engineering Standardized processes and tools (more efficient, robust and maintainable) Gas Mega Project in Middle East Cloud engineering utilized Over 200 engineers from 8 countries working in cloud with Virtual Machines Universal Safety IO Used to accommodate late changes Over 3,000 global engineering resources used from remote locations

21 Placing Customer Experience at the Center of Everything We Do Order Delivery & Installation Support Mission Statement Improve the customer s experience at every touch point from order through the lifetime of the system Simplifying quotations Customer order portal Clear Order tracking Increased skills and response time Technical Assistance Call (TAC) Center improved response & resolution guidelines Customer self-help portal Increasing value & reducing TCO Assurance 360 Timely order acknowledgement Shortened lead times for standard products More frequent communication on project tasks HUE Honeywell User Experience

22 HPS Priorities Build and strengthen our HPS culture to put customer experience at the heart of everything we do Continue to invest in technology differentiation and leading edge automation solutions Expand our instrumentation offering to connect data from the field, to the control room, to the board room Continue to address our customer s biggest concerns De-risk project execution Ensure operational integrity and excellence

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