Slide 1: Q3-2023 Earnings Call
Q3-2023 Earnings Call NYSE: ALLE October 31, 2023
Slide 2: Cautionary Statements
Cautionary Statements Forward-Looking Statements This presentation contains "forward-looking statements," which are statements that are not historical facts, including, but not limited to, statements related to the Full-Year 2023 Outlook, and statements regarding market trends, electronics growth, g
Slide 3: Strong Execution Drives Q3 Results
Strong Execution Drives Q3 Results Mid-teens organic growth in electronics / software Continued margin expansion Healthy balance sheet and cash flow Raising adjusted EPS outlook 3 Q3-2023 Financial Results See press release for non-GAAP reconciliations
Slide 4: Vision and Strategy
Vision Enabling seamless access and a safer world Strategy Allegion creates value as a solutions provider of security and access Build on Deliver New Value Our Legacy in Access Be the Partner Operate with of Choice Excellence 4 Q3-2023 Financial Results
Slide 5: Capital Allocation
Capital Allocation Strategic investments driving seamless access Invest for Organic Growth Dividend1 Mergers & Acquisitions2 Share Repurchases 1Dividend growth commensurate with earnings 5 Q3-2023 Financial Results 2Maintain investment grade credit rating
Slide 6: Q3-2023 Financial Summary
Q3-2023 Financial Summary Revenue1 Adjusted OI Adjusted EBITDA Adjusted ACF1 $Millions Margin1 Margin1 EPS1 YTD +0.5% +110 bps +110 bps +12.1% +42.0% $913.7 $917.9 23.2% 24.7% $1.94 $320.4 22.1% 23.6% $1.73 $225.6 Q3 22 Q3 23 Q3 22 Q3 23 Q3 22 Q3 23 Q3 22 Q3 23 Q3 22 Q3 23 ▪ Organic revenue decline
Slide 7: Q3-2023 Revenue Results
Q3-2023 Revenue Results $Millions 950.0 $914 $923 $913 $918 900.0 $862 850.0 800.0 $773 750.0 700.0 650.0 600.0 6.4% 18.6% 11.4% 15.0% 5.6% -0.6% 550.0 Revenue Growth Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Reported Organic1 1 Current Quarter Revenue Prior Quarter Revenue Organic Growth % no
Slide 8: Q3-2023 Allegion Americas Results
Q3-2023 Allegion Americas Results Revenue1 Adjusted OI%1 Adjusted EBITDA%1 $Millions -0.1% +140 bps +150 bps $741.9 $740.9 29.6% 27.0% 28.4% 28.1% Q3 22 Q3 23 Q3 22 Q3 23 Q3 22 Q3 23 Q3 Revenue Performance Q3 Adjusted Margin Performance ▪ Flat organic revenue on a challenging prior-year ▪ Price and
Slide 9: Q3-2023 Allegion International Results
Q3-2023 Allegion International Results Revenue1 Adjusted OI%1 Adjusted EBITDA%1 $Millions +3.0% +180 bps +190 bps $171.8 $177.0 13.4% 15.9% 11.6% 14.0% Q3 22 Q3 23 Q3 22 Q3 23 Q3 22 Q3 23 Q3 Revenue Performance Q3 Adjusted Margin Performance ▪ Organic revenue decline of 2.8% primarily driven by ▪ Pr
Slide 10: Healthy Balance Sheet & Cash Flow
Healthy Balance Sheet & Cash Flow Available Cash Flow1 Working Capital2 Leverage $Millions $Millions $320.4 Working Capital % of Revenue 8.2% 2.9x $225.6 6.3% 2.3x 2.4x 2.5x 2.0x 1.7x Q3 YTD Q3 YTD Q3 2022 Q3 2023 2021 Q4 2022 Q3 2023 4 2022 2023 3 Gross Debt/Adj EBITDA Net Debt /Adj EBITDA Capex $4
Slide 11: Full-Year 2023 Outlook
Full-Year 2023 Outlook Prior Outlook Current Outlook Americas: 15% to 16% Americas: 15% to 16% Reported Revenue International: -1% to flat International: -1% to flat Total: 11.5% to 12.5% Total: 11.5% to 12.5% Americas: 7.5% to 8.5% Americas: 7.5% to 8.5% Organic Revenue1 International: -2% to -1% I
Slide 12: Allegion: Pioneering Safety
ALLEGION’ PIONEERING SAFETY
Slide 13: Appendix
ALLEGION’ PIONEERING SAFETY
Slide 14: Q3-2023 Allegion EPS Performance
Q3-2023 Allegion EPS Performance M&A: ($0.03) Restructuring ($0.02) Amortization: ($0.12) M&A: $0.16 Loss on divestiture: $0.10 Non-cash purchase accounting related to Access Technologies: $0.08 Amortization: $0.09 14 Q3-2023 Financial Results See press release for non-GAAP reconciliations
Slide 15: Full-Year 2023 EPS Outlook Details
Full-Year 2023 EPS Outlook Details Notes: ▪ Operational performance driving higher outlook ▪ Full-year adjusted effective tax rate of ~15% ▪ Full-year average diluted share count remains at ~88.3M ▪ Adjustment increase primarily related to restructure activities Raising adjusted EPS outlook to $6.80
Slide 16: Proven Track Record of Quick Deleverage
Proven Track Record of Quick Deleverage Manage leverage to support growth while maintaining investment grade rating 3.4x 2.9x 2.9x 2.9x 2.9x 2.6x 2.4x 2.3x 2.3x 2.2x 2.1x 2.9x 3.0x 2.5x 2.3x 1.9x 2.0x 1.8x 1.7x 1.6x 1.5x 1 2014 2015 2016 2017 2018 2019 2020 2021 2022 Q3 2023 2 Gross Debt/Adj EBITDA
Slide 17: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures The company presents operating income, operating margin, net earnings and diluted earnings per share (EPS) on both a U.S. GAAP basis and on an adjusted (non-GAAP) basis, revenue growth on a U.S. GAAP basis and organic revenue growth on a non-GAAP basis, EBITDA, ad
Slide 18: About Allegion
About Allegion™ Allegion (NYSE: ALLE) is a global pioneer in seamless access, with leading brands like CISA®, Interflex®, LCN®, Schlage®, SimonsVoss® and Von Duprin®. Focusing on security around the door and adjacent areas, Allegion secures people and assets with a range of solutions for homes, busi