Slide 1: Allegion Fourth-Quarter 2018 Results
Allegion Fourth-Quarter 2018 Results February 19, 2019
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934, including statements regarding the Company
Slide 3: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures The Company presents operating income, operating margin, net earnings, 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 (non-GAAP), and also presents adj
Slide 4: 2018 Fourth Quarter / Full-Year Update
2018 Fourth Quarter / Full-Year Update Strong Revenue Strong double-digit total top-line growth (12.7%) and organic growth (6.7%) in the Growth quarter – with strength across all regions Americas electronics growth of ~7% in the quarter; Strong full-year growth of Electronics high-teens Non-resident
Slide 5: Fourth-Quarter Financial Summary
Fourth-Quarter Financial Summary 1 1 Revenue Adjusted OI Margin Adjusted EPS YTD ACF $Millions $Millions Up Down Up Up 12.7% 130 bps 9.9% 37.2% $702.4 $1.22 $408.7 22.0% $1.11 $623.0 20.7% $297.9 Q4 17 Q4 18 Q4 17 Q4 18 Q4 17 Q4 18 Q4 YTD Q4 YTD 2017 2018 • Organic growth up 6.7% • 2018 acquisitions
Slide 6: Connected Home Innovation
Connected Home Innovation Schlage Encode™ Next generation smart lock (presale) The first-ever Wi-Fi-enabled deadbolt to work directly with Key by Amazon app and Ring devices ▪ Built-in Wi-Fi connectivity (no hub required) ▪ Secure, remote access from anywhere ▪ Amazon Cloud Cam delivery monitoring ▪
Slide 7: Allegion Revenue Results
Fourth-Quarter 2018 Allegion Revenue Results Q4 18 Q4 18 FY 18 FY 18 1 1 Q4 18 Reported Organic Reported Organic Growth Growth Growth Growth Price 1.5% Americas 13.0% 7.6% 12.5% 6.8% Volume 5.2% EMEIA 4.4% 4.3% 12.7% 3.7% Organic 6.7% Asia Pacific 44.9% 4.6% 30.7% 3.1% Acquisitions 7.3% Currency -1.
Slide 8: Allegion Results
Fourth-Quarter 2018 Allegion Results 1 Revenue Adjusted Operating Income ($millions) ($millions) +12.7% +5.9% $623.0 $702.4 $137.1 $145.2 Q4 17 Q4 18 Q4 17 Q4 18 Adj OM % 22.0% 20.7% Adj EBITDA % 24.6% 23.4% Q4 Revenue Performance Q4 Adjusted Operating Margin -130bps ▪ Total growth +12.7%; Organic g
Slide 9: Allegion EPS Performance
Fourth-Quarter 2018 Allegion EPS Performance Q4 $0.17 $1.39 $0.07 $0.10 $1.22 $0.01 $0.02 $0.03 $1.01 $1.11 $0.10 Q4 17 Restructure / Q4 17 Adjusted Operations Tax Rate Acquisitions Investments Interest / Q4 18 Adjusted Restructure / Q4 18 Reported EPS M&A / Debt EPS 1 Other, Net / EPS 1 M&A / Tax R
Slide 10: Americas Results
Fourth-Quarter 2018 Americas Results 1 Revenue Adjusted Operating Income ($millions) ($millions) +13.0% +5.3% $436.1 $492.7 $125.2 $131.8 Q4 17 Q4 18 Q4 17 Q4 18 Adj OM % 28.7% 26.8% Adj EBITDA % 30.3% 28.6% Q4 Revenue Performance Q4 Adjusted Operating Margin -190bps ▪ Total revenue growth +13%; Org
Slide 11: EMEIA Results
Fourth-Quarter 2018 EMEIA Results 1 Revenue Adjusted Operating Income ($millions) ($millions) +4.4% -10.4% $150.8 $157.4 $25.1 $22.5 Q4 17 Q4 18 Q4 17 Q4 18 Adj OM % 16.6% 14.3% Adj EBITDA % 21.7% 19.3% Q4 Revenue Performance Q4 Adjusted Operating Margin -230bps ▪ Total revenue growth +4.4%; Organic
Slide 12: Asia-Pacific Results
Fourth-Quarter 2018 Asia-Pacific Results 1 Revenue Adjusted Operating Income ($millions) ($millions) +44.9% +38.3% $52.3 $6.5 $36.1 $4.7 Q4 17 Q4 18 Q4 17 Q4 18 Adj OM % 13.0% 12.4% Adj EBITDA % 15.0% 14.7% Q4 Revenue Performance Q4 Adjusted Operating Margin -60bps ▪ Total revenue growth +44.9%; Org
Slide 13: Allegion ACF
Fourth-Quarter 2018 Allegion ACF Available Cash Flow¹ $500.0 ($millions) $408.7 $400.0 ▪ Increase in ACF is primarily driven by higher $297.9 $300.0 earnings and the Q1 2017 $50 million $200.0 discretionary pension funding $100.0 $- FY 2017 FY 2018 Working Capital² & Cash Conversion Cycle (CCC)³ FY
Slide 14: Full-Year 2019 Allegion Revenue Outlook
Full-Year 2019 Allegion Revenue Outlook Region Revenue Projection1 Markets Americas ▪ Continued strength in non-residential verticals, led by institutional Total: 5% to 6% ▪ Residential new construction softening mitigated by strength in Organic: 5% to 6% electronics ▪ Electronics projected to outpa
Slide 15: Full-Year 2019 Allegion EPS Outlook
Full-Year 2019 Allegion EPS Outlook 2018 Reported EPS $4.54 Adjustments¹ ($0.04) 2018 Adjusted EPS $4.50 Adj. Op. Income EPS impact Operational Improvements (Growth / OPEX / FX) $0.62 to $0.77 +$0.47 to $0.62 or Investments ~($0.15) ~10% to 14% Interest Expense ($0.01) Other Income ($0.07) Tax Rate
Slide 16: Summary
Summary ▪ Delivered strong 2018 full-year organic revenue growth of 6% ▪ Strong electronics growth ▪ Full year adjusted EPS of $4.50, up nearly 14% compared to prior year ▪ Strong cash generation of $408.7 million, increased ~37% ▪ Continue to execute on flexible capital allocation strategy ▪ For 20
Slide 17: Appendix
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Slide 18: Full-Year 2018 Allegion EPS Performance
Full-Year 2018 Allegion EPS Performance FY $0.05 $0.01 $0.06 $4.50 $0.04 $4.54 $0.17 $0.37 $0.12 $1.11 $3.96 $2.85 FY 17 Restructure / FY 17 Operations Tax Rate Acquisitions Interest / Share Count Investments FY 18 Restructure / FY 18 Reported EPS M&A / Debt Adjusted EPS 1 Other, Net / Adjusted EPS
Slide 19: Allegion
| i. ALLEGION