Allegion Plc · NYSE:ALLE
Allegion — Q3 2014 Earnings Presentation
17 slides from Allegion's earnings presentation, Oct 30, 2014
Slide 1: Allegion Third Quarter 2014 Results
Allegion Third Quarter 2014 Results October 30, 2014
Slide 2: Safe Harbor
Safe Harbor This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding the Company's 2014 financial performance, the Company's growth strategy, the Company's capital allocation strategy, the Comp
Slide 3: Third Quarter Financial Highlights
Third Quarter Financial Highlights Revenue of $546.7 million increased +6.8% on an adjusted basis1, +6.4% on an adjusted organic basis2 Americas organic revenue growth of +8.5% on an adjusted basis EMEIA organic revenue declined (0.9%) Asia Pacific organic revenue growth +1.9% All regions delivered
Slide 4: Strategy Update
Strategy Update Key Strategies Innovation in Growth in Expand In Existing and Operational Opportunistic Emerging Core Markets New Product Excellence Acquisitions Markets Categories Launch of Engage platform, extending leadership in electronic offerings Continued execution of EMEIA margin recovery in
Slide 5: Engage Platform
Engage Platform This quarter we introduced ENGAGE™ technology to the market: This technology streamlines the transition from mechanical keys to electronic credentials Easy to install, manage and use Accommodates future expansion and reconfiguration Provides the opportunity for a global technology pl
Slide 6: Third Quarter 2014 Allegion Results
Third Quarter 2014 Allegion Results Adjusted Revenue(1) ($millions) Q3 Performance Total growth +6.8%; organic growth +6.4% Solid Americas performance with volume growth in all segments of the market European revenue down due to geopolitical uncertainty and selective exiting of certain markets Joint
Slide 7: EPS Performance
Third Quarter 2014 Allegion EPS Performance Q3 Price* $0.07 Volume/Mix $0.06 Productivity $0.06 Inflation* ($0.06) * Reflects price actions to compensate for higher inflation (primarily Venezuela) 7 | Third-Quarter 2014 Results
Slide 8: Results - Americas
Third Quarter 2014 Allegion Results - Americas Adjusted Revenue(1) Q3 Performance ($millions) Adjusted revenue growth +9.0%; adjusted organic growth +8.5% Mid single-digit U.S. residential growth driven by strength in builder markets Mid single-digit non residential growth with strength in the mecha
Slide 9: Results - EMEIA
Third Quarter 2014 Allegion Results - EMEIA Revenue Q3 Performance ($millions) Revenue declined (2.8%); organic (0.9%) Favorable FX early in the quarter; offset by September movement Geopolitical headwinds; continued market weakness across key markets Adjusted Operating Income(1) ($millions) Q3 Adju
Slide 10: Results – Asia Pacific
Third Quarter 2014 Allegion Results – Asia Pacific Revenue ($millions) Q3 Performance Revenue growth +6.9%; organic +1.9% High single digit hardware growth led by strength in North Asia, Australia, and New Zealand Strong system integration backlog exiting Q3 Adjusted Operating Income(1) ($millions)
Slide 11: Available Cash Flow
Third Quarter 2014 Allegion ACF Available Cash Flow 1 ($millions) Q3 YTD ACF is $9.7 million lower than prior year Q3 YTD CAPEX is $27.8 million higher than prior year due to new product development, information systems and spin related projects Working Capital 2 and Cash Conversion Cycle(CCC)3 Cont
Slide 12: Capital Allocation Strategy
Capital Allocation Strategy Leverage Management Target 2.75-3.25x of gross debt/EBITDA Amendment of existing credit facility in October; lowers cost of capital, continues to provide liquidity and flexibility to grow business Organic Growth Shareholder M&A Investment Distribution Expand core portfoli
Slide 13: Effective Tax Rate Update
Effective Tax Rate1 Update 38.4% 31% Mid-20’s ~28% Aspirational Goal <20% Investor Day, March, 2014 2013 2014(fcst) 2016 (fcst) Revised Accelerating reduction in effective tax rate; exceeding initial target by 2015. (1) Effective tax rate adjusted for spin-off and other charges; Updated to reflect U
Slide 14: Full-Year 2014 Revenue Update
Full-Year 2014 Revenue Update* Americas High single-digit residential growth and strong Venezuelan FY ~5% growth (pricing driven) offsetting modest non-residential growth as choppy markets continue Non-residential price increase announced early October Lower revenue after restatement of divested UK
Slide 15: 2014 Guidance Update
2014 Guidance Update Adjusted YOY revenue change ~4.5% 2014 reported EPS from continuing operations $2.07 to $2.12 2014 restructure, spin costs and the write-off of debt ~$(0.30) issuance costs Adjusted 2014 EPS from continuing operations $2.37 to $2.42 . Assumptions and Notes: Full-year effective t
Slide 16: Summary
Summary Q3 adjusted organic revenue growth +6.4% Solid growth in U.S. residential and non-residential segments Managing through soft U.S. institutional and southern Europe markets All regions delivered Q3 margin improvement; total adjusted operating margin improved 150 bps Reduction in effective tax
Slide 17: AR Sy
AR Sy ALLEGION