Allegion Plc · NYSE:ALLE

Allegion — Investor Day (March 2017)

97 slides from Allegion's investor day presentation, Mar 7, 2017

1. Slide 1: Allegion: Pioneering Safety – 2017 Investor & Analyst Day

   Allegion: Pioneering Safety 2017 Investor & Analyst Day New York Stock Exchange (New York, NY) March 7, 2017 1 | 2017 Allegion Investor & Analyst Day

2. Slide 2: Safe Harbor

   Safe Harbor This presentation contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding the Company's 2017 financial performance, the Company's growth strategies, the Company's capital allocation strategy, the Com

3. Slide 3: Safe Harbor (Continued)

   Safe Harbor (Continued) The Company defines the presented non-GAAP measures as follows:  Adjustments to revenue, operating income, operating margin, earnings from continuing operations, EPS from continuing operations and EBITDA include items that are considered to be unusual or infrequent in nature

4. Slide 4: 2017 Investor & Analyst Day Agenda

   2017 Investor & Analyst Day Agenda Company Overview Dave Petratis Innovation & Electro-Mechanical Convergence Todd Graves & Rob Martens Regional Overview: Americas Tim Eckersley 15-Minute break; Product Tables Open Regional Overview: EMEIA Lúcia Veiga Moretti Regional Overview: Asia Pacific Jeff Woo

5. Slide 5: Company Overview

   2017 Investor & Analyst Day Company Overview Dave Petratis, Chairman, President & CEO

6. Slide 6: Our vision is to make the world safer as a company of experts

   Our vision is to make the world safer as a company of experts by securing the places where people thrive Our purpose is to create peace of mind by pioneering safety and security 6 | 2017 Allegion Investor & Analyst Day

7. Slide 7: 7 | 2017 Allegion Investor & Analyst Day

   7 | 2017 Allegion Investor & Analyst Day

8. Slide 8: Our Leadership

   Our Leadership Geographical Leaders Tim Eckersley Lúcia Veiga Moretti Jeff Wood Senior Vice President Senior Vice President Senior Vice President President, Americas President, EMEIA President, Asia-Pacific Dave Petratis CEO & Chairman Jeff Braun Todd Graves Tracy Kemp Senior Vice President Senior V

9. Slide 9: Company Highlights

   Company Highlights A leading global provider of security products and solutions Serving residential and non-residential end markets Strong brands with leading market positions Industry-leading organic growth and EBITDA margins High level of cash flow conversion performance Balanced and flexible capi

10. Slide 10: Global Reach

    Global Reach $2,238 Million in 2016 Revenue | 9,500+ Employees | 10,000+ Channel Partners Corporate Headquarters: Dublin, Irl. Regional Offices: Carmel, Ind. | Faenza, Itl. | Shanghai, Chn. Asia Pacific $106 Million in 2016 Revenue Americas $1,646 Million in 2016 Revenue EMEIA 10 | 2017 Allegion Inv

11. Slide 11: Family of Brands

    Family of Brands 11 | 2017 Allegion Investor & Analyst Day

12. Slide 12: Allegion Portfolio Transformation

    Allegion Portfolio Transformation + iDevices + Zero International® + Brio® + Milre® + SimonsVoss® 2015 2017 + AXA® - Bocom Wincent - Venezuelan Business + Republic 2014 2016 + Schlage Lock de Colombia + Trelock® + Eco Schulte + FSH® - UK Doors & Services Businesses + Acquisition/Investment - Divesti

13. Slide 13: Measuring Our Accomplishments

    Measuring Our Accomplishments Financial Targets 2014-2016* Actual as of 12/31/2016  Revenue Growth 7-9% Revenue Growth Rate  Organic Growth: 4-5% CAGR  Organic Growth: 5.3% CAGR  Acquisitions: 3-4% CAGR  Acquisitions: 3.2% CAGR Adjusted Earnings  > 12% CAGR  15.3% CAGR Per Share Growth Availa

14. Slide 14: Industry-Leading Safety Record

    Industry-Leading Safety Record Over the Total Recordable Incident Rate Last Three Years:  28% improvement in TRIR  23% decrease in the number of recordable injury cases Source: Company reports and 2016 U.S. Bureau Labor Statistics for Manufacturers 14 | 2017 Allegion Investor & Analyst Day

15. Slide 15: Key Strategies

    Key Strategies Innovation in Opportunistic Expand in Existing & New Core Markets Acquisitions Product Categories  Channel management  Accelerate new product  Expand geographic and demand creation development / vitality presence  Commercial retrofit and index  Emerging technology renovation  Gr

16. Slide 16: Electro-Mechanical Convergence

    Electro-Mechanical Convergence The Security Industry is at the cusp of major changes and convergences: Technology transfer  Bringing new levels of Mechanical & integration and across residential, electro-mechanical multi-family, convenience solutions commercial  Adaptive environments  Enhanced de

17. Slide 17: 2015 & 2016 Product Launches

    2015 & 2016 Product Launches Leader in Innovative Products 17 | 2017 Allegion Investor & Analyst Day

18. Slide 18: Vitality: Allegion's Innovation

    Vitality: Allegion’s Innovation Allegion’s Investments in Product Innovation Drive Vitality1 18 | 2017 Allegion Investor & Analyst Day 1Vitality Index is revenue from product innovations in the last three years as a percentage of total revenue

19. Slide 19: Capital Deployment

    Capital Deployment Investment in Growth  New product development  Expand core portfolio and channel capability M&A  Product and geographic expansion  Acquire with a disciplined approach Shareholder Distribution  Dividend growth  Opportunistic share repurchase to offset dilution and return exce

20. Slide 20: Market Expectations: The Next Three Years

    Market Expectations: The Next Three Years Region Markets Americas  U.S. non-residential markets driven by continued strength in institutional and commercial vertical markets  U.S. residential markets growth driven by new home construction and electronic adoption  Market for electronic products ex

21. Slide 21: Strategies by Region

    Strategies by Region Expand Growth in Strategy Enterprise Opportunistic in Core Innovation Emerging Focus Areas Excellence Acquisitions Markets Markets Electronic Capabilities Americas  Core expansion  Organic innovation EMEIA  Operational improvements  Channel / go- to-market transformation Asi

22. Slide 22: Financial Targets

    Financial Targets Three-Year Financial Targets 2017-2019* Organic Revenue  Improving market fundamentals 4 - 6% CAGR Growth1  Incremental investments accelerating organic revenue growth above market EBITDA Margin Greater than  Leverage on incremental volume +200 bps  Net of investments EPS Growt

23. Slide 23: Summary

    Summary  Executing on our strategy and delivering shareholder value  Strong industry fundamentals  Leading the industry in top-line organic growth and margins  Driving electro-mechanical convergence Allegion Remains Focused on Delivering Long-Term Shareholder Returns 23 | 2017 Allegion Investor

24. Slide 24: Innovation: Driving Electro-Mechanical Convergence

    2017 Investor & Analyst Day Innovation: Driving Electro- Mechanical Convergence Todd Graves, SVP Engineering & Technology Rob Martens, Allegion Futurist & VP of Strategy & Partnerships

25. Slide 25: Electro-Mechanical Convergence

    Electro-Mechanical Convergence 25 | 2017 Allegion Investor & Analyst Day

26. Slide 26: Our History of Leadership in Electronics

    Our History of Leadership in Electronics Schlage Schlage Schlage’s SimonsVoss Keypad Schlage Sense™ First Patent e-Cylinder Locks AD/CO Bluetooth 1909 1998 2006 2010 2015 ISM Band WiFi Zigbee Bluetooth Z-Wave Bluetooth LE Radios 1997 2003 2004 2005 2010 1989 2003 2008 2014 Schlage Wyreless Schlage S

27. Slide 27: Our History of Leadership in Electronics

    Our History of Leadership in Electronics 27 | 2017 Allegion Investor & Analyst Day

28. Slide 28: It Starts at the Door…

    It Starts at the Door… 28 | 2017 Allegion Investor & Analyst Day

29. Slide 29: It Starts at the Door…

    It Starts at the Door… 29 | 2017 Allegion Investor & Analyst Day

30. Slide 30: Success Factors in IoT

    Success Factors in IoT Focus on outcomes rather than technologies Open architectural approaches are required to stimulate IoT developers and achieve coordination across the value chain Simple use cases deployed more quickly will naturally enable more complex ones Design thinking is key to engage the

31. Slide 31: Open Architectures

    Open Architectures 31 | 2017 Allegion Investor & Analyst Day

32. Slide 32: Global Complexity

    Global Complexity 32 | 2017 Allegion Investor & Analyst Day

33. Slide 33: Global Connectivity Technologies

    Global Connectivity Technologies 33 | 2017 Allegion Investor & Analyst Day

34. Slide 34: Leadership in Electronic Locks

    Leadership in Electronic Locks 34 | 2017 Allegion Investor & Analyst Day

35. Slide 35: Allegion's Global Footprint

    Allegion’s Global Footprint VERSCHLOSS EN BLOCCAT O 고 정 35 | 2017 Allegion Investor & Analyst Day

36. Slide 36: 36 | 2017 Allegion Investor & Analyst Day

    36 | 2017 Allegion Investor & Analyst Day

37. Slide 37: Two Examples of Technology Adoption

    Two Examples of Technology Adoption Voice Over IP Digital Cameras Quick. Driven in part by capital Slower, but still a surge. availability and immediate cost savings. 37 | 2017 Allegion Investor & Analyst Day

38. Slide 38: What is the Opportunity for Electronic Security?

    What is the Opportunity for Electronic Security? Residential: Non-Residential: Single Family Homes Perimeter Focused 100+ million homes ~6-12% penetration 200+ million doors ~4-6% penetration Growth Drivers: Growth Drivers: Mega-tech / Smart home Complete and mature options Millennial homeowner 

39. Slide 39: Technology, Process & Partnerships

    Technology, Process & Partnerships 39 | 2017 Allegion Investor & Analyst Day

40. Slide 40: Summary

    Summary  Electro-mechanical convergence is just beginning  Allegion has unique abilities to accelerate adoption  Open architectures provide competitive advantage  The opportunity is significant 40 | 2017 Allegion Investor & Analyst Day

41. Slide 41: Americas

    2017 Investor & Analyst Day Americas Tim Eckersley, SVP & President of the Americas

42. Slide 42: Who We Are

    Who We Are  Schlage, LCN and Von Duprin are the premier brands in the industry and invented the categories in which they compete  Industry-leading organic growth and margins  Differentiated brand, market and product strength in both the residential and non- residential sectors  Technology partne

43. Slide 43: What We Sell

    What We Sell Mechanical Electronic Hollow Metal Portable Hardware Locking Doors & Frames Security  Mechanical Locks  Electronic Locks  Frames  Bicycle Locks  Exit Devices  Readers  Doors  Cable Locks  Door Closers  Credentials  Specialty Doors  Bicycle Lights  Key Systems  Electric Str

44. Slide 44: Where We Play

    Where We Play Market 2017 - 2019 Business Market Trends Size1 Market Outlook  Institutional segment rebound continues  Steady growth in commercial verticals Commercial  Multi-family growing, albeit at a moderate rate $4.5 - 5.7B Mechanical  Continued reliance on code and application experts  Ge

45. Slide 45: Industry-Leading Financial Performance

    Industry-Leading Financial Performance Revenue¹ Adjusted EBITDA¹ $1,646 6.5% $476.9 Organic 4.4% Revenue CAGR CAGR 28.9% $1,463 $418.7 28.6% 2013 2016 2013 2016 2016 margin includes environmental remediation charge of $15M, 90 basis points  Innovation and channel initiatives driving organic growth

46. Slide 46: Our Customers Value Allegion

    Our Customers Value Allegion The Home Depot Do-It-Best Supplier of the Year - 2016 Supplier of the Year - 2016 46 | 2017 Allegion Investor & Analyst Day

47. Slide 47: Americas Strategic Priorities

    Americas Strategic Priorities Growth Pillars Priorities Key Elements Innovation in  Ease-of-connectivity and architectural design Electronic Existing & New  Software partners and channel development Market Adoption Product Categories  Accelerate adoption of electronics and style and Expand in Res

48. Slide 48: Electronics Market Adoption

    Electronics Market Adoption Driving Increased Adoption in Non-Residential Markets  Continue to innovate in product, simplicity and efficiency, while accelerating architectural design and suiting across platforms  Broader and deeper connectivity with leading software alliance members  New innovati

49. Slide 49: Residential Category Expansion

    Residential Category Expansion Grow the Door Hardware Category in Residential Markets  Continue to drive thought leadership in security and connected home to drive adoption and ensure security value proposition  Leverage electronic lock leadership position with mega-techs and monitored security ma

50. Slide 50: Targeted Channel Segmentation

    Targeted Channel Segmentation Develop and Execute Targeted Channel Value Creation  Develop and motivate targeted channel partners in underserved renovation and repair market segments  Align product portfolio with intentional brand and price positioning  Accelerate growth in nationwide locksmith b

51. Slide 51: Superior Customer Experience

    Superior Customer Experience Create Differentiated Customer Experience in Go-to-Market Models  Systems, processes and tools focused on driving transparency, simplicity and efficiency to our customers  Transform our delivery execution through regional distribution network  Continue deployment of f

52. Slide 52: Republic Door Acquisition

    Republic Door Acquisition  Leading hollow metal manufacturer based in McKenzie, TN  Strong leadership team driving profitable growth in the market  Modern, lean manufacturing environment with capacity to support growth Republic Steelcraft  Existing regional distribution facilities, Continuous We

53. Slide 53: Americas Summary

    Americas Summary  Market-leading execution delivering above- market revenue growth and leverage, while accelerating innovation and vitality  Continued favorable macro-market dynamics with steady and continued growth across all business sectors  Focused and deliberate creation of value in our chan

54. Slide 54: EMEIA

    2017 Investor & Analyst Day EMEIA Lúcia Veiga Moretti, SVP & President of EMEIA

55. Slide 55: Who We Are

    Who We Are  Strong brands with history of innovation  Industry-leading portfolio of vertical solutions  Leading market position in:  Mechanical hardware (South Europe, France, UK and Middle East)  Electronic locks (Europe)  Integrated security and workforce Corporate HQ management solutions (D

56. Slide 56: What We Sell

    What We Sell Mechanical Electronic Workforce Healthcare Portable Hardware Access Control Management Hardware Security  Mechanical Locks  Electronic Locks  T&A Readers  Bicycle Locks  Safety &  Key Systems  Readers  Credentials  Cable Locks Comfort  Exit Devices  Credentials  T&A Software

57. Slide 57: Where We Play

    Where We Play Market 2017-2019 Segment Market Trends Size1 Market Outlook2  Improved new build activity in commercial and institutional vertical Electro- markets Flat to Low Mechanical  Uncertainty about the impact of Brexit and political elections in key $3.7 - $4.0B Single Digit Hardware countri

58. Slide 58: Portfolio Convergence

    Portfolio Convergence Electro-Mechanical Hardware Portable Security Residential Commercial Hospitality Electronic Access Control Education Healthcare Healthcare Hardware Integrated Solutions Innovative Solutions 58 | 2017 Allegion Investor & Analyst Day for a Changing World

59. Slide 59: Business Transformation Highlights

    Business Transformation Highlights Background Our Journey 2013 - 2016  Complex mix of businesses and sub-optimal  Focused business units and leadership scale and footprint  Portfolio transformation  Strategic priority: Recover profitability  Divestitures  Acquisitions - Higher growth geographi

60. Slide 60: EMEIA Strategic Priorities

    EMEIA Strategic Priorities Growth Pillars Priorities Key Elements Enterprise Excellence  Channel segmentation, strategic pricing Drive  Common systems, lean processes Profitability Expand in  Facility optimization, back-office Core Markets consolidation  Increase presence in new build market Gro

61. Slide 61: Increase Presence in New Build Market

    Increase Presence in New Build Market Drive Demand of Value-Adding Solutions  Trusted advisor to our vertical end markets  Institutional – Education, healthcare, government  Commercial – Offices, hospitality  Residential – Single homes, multi-family  Influence the market through increased speci

62. Slide 62: Establish Global Portable Business

    Establish Global Portable Business Reinforce Global Presence Across Security and Safety Categories  Effective utilization and deployment of our three market-leading brands  Expand OEM install base with bike manufacturers and drive aftermarket retail  Lead the adoption of connected portable platfo

63. Slide 63: Electro-Mechanical Convergence

    Electro-Mechanical Convergence Lead Adoption of Connected Building Technologies  Evolve our value proposition beyond security to embrace efficiency and convenience  Enhance capabilities to influence the needs and preferences of today’s connected end users  Leverage channel presence through simple

64. Slide 64: SimonsVoss Acquisition

    SimonsVoss Acquisition  Leading mechatronic technology  Miniaturization, energy efficiency, wireless connectivity  Leading position in DACH region, which can be expanded across geographies  Complementary product portfolio  Technology to be leveraged globally 64 | 2017 Allegion Investor & Analys

65. Slide 65: EMEIA Summary

    EMEIA Summary  Achieved significant profitability improvements  Portfolio enhancements through M&A  Product innovation  Geographic expansion  Business transformation  Drive incremental profitability  Foundation to accelerate growth EMEIA’s Business Transformation Journey Continues 65 | 2017 A

66. Slide 66: Asia Pacific

    2017 Investor & Analyst Day Asia Pacific Jeff Wood, SVP & President of Asia Pacific

67. Slide 67: Who We Are

    Who We Are  Strong brand image in premium / high-end segments  Customer-focused offerings enabled by project spec-in capabilities, product design, supply chain flexibility and channel management  Leading positions in selected markets and segments  Large scale projects across the Regional Office

68. Slide 68: What We Sell

    What We Sell Mechanical Electro- Electronic Folding & Security Solutions Hardware Mechanical Access Control Sliding Products  Transportation  Locks Hardware  Electronic Locks  Folding Door  Healthcare  Exit Devices  Magnetic Locks  Credentials Hardware  Commercial Office  Door Controls  E

69. Slide 69: 2016 Asia-Pacific Revenue by Geography

    2016 Asia-Pacific Revenue by Geography $106 Million in 2016 China ~25% Australia & New Zealand ~50% North Asia ~20% Southeast Asia ~5% 69 | 2017 Allegion Investor & Analyst Day

70. Slide 70: Transformation to Focus on Profitable Growth

    Transformation to Focus on Profitable Growth Key Performance Indicators in Asia Pacific (2013-2016) Hardware Total Revenue (US$ Million) 23% Revenue CAGR (Hardware Only) 1160 bps Adj. OI¹ Margin (US$ Million) Improvement (Hardware Only) 2013 2014 2015 2016 Key  Closed IR Fu Hsing  Acquired FSH  A

71. Slide 71: Where We Play

    Where We Play Market 2017 - 2019 Geography Market Trends Size Market Outlook  Growing investment in residential construction fueled by low interest rates, rising property values, immigration, etc. Australia / New  Increasing healthcare / aged-care vertical driven by aging population $0.5B Zealand

72. Slide 72: Electro-Mechanical Convergence

    Electro-Mechanical Convergence Asia Pacific Market Electronic vs. Mechanical  Market transitioning towards electronics, driven by rising e-lock adoption, mobile device connectivity and wireless networks Electronic 30%  Korea is a leading market in electronics  High penetration from 40% to 75% ove

73. Slide 73: Asia Pacific Strategic Priorities

    Asia Pacific Strategic Priorities Growth Pillars Priorities Key Elements Expand in Core Markets  Product portfolio expansion Lead Electro-  Electro-mechanical market and Mechanical channel expansion Convergence Growth in  M&A Emerging Markets  Key vertical markets (healthcare, Innovation in Grow

74. Slide 74: Electronic Locks Innovation in Korea

    Electronic Locks Innovation in Korea  Strategic expansion into Korean market and digital door locks with Milre in August 2015  Launched 11 new products driving increased vitality index  New push pull in 2017 with IoT technology  Expanding markets outside Korea  Achieved 16% organic revenue grow

75. Slide 75: Residential Vertical Market Penetration in China

    Residential Vertical Market Penetration in China  Utilize strength in B2B project business to develop relationships in new construction  Signed 20+ strategic partners among China top 100 developers  80% sales from electronic locks  Expand beyond new construction to replacement market through ret

76. Slide 76: Channel Expansion in New Zealand

    Channel Expansion in New Zealand  Channel initiatives contributing to growth  Identified aluminum door and window partnership with fabricator OEM  Developed new range of products covering mid- and high-end segments  Investment in marketing and Schlage brand leverage  Grew New Zealand business ~

77. Slide 77: Successful M&A Accelerating Growth

    Successful M&A Accelerating Growth  Three acquisitions focused on higher profit growth segments: Electro-mechanical and China Mainland premium niche products North Asia  Integration and synergies  Enable investment in new products  Inclusion in specification business, South East Asia expanded of

78. Slide 78: Asia Pacific Summary

    Asia Pacific Summary  Transforming portfolio, exited system integration business  Investments in electro-mechanical products driving revenue growth  Focus on select verticals: Healthcare, transportation, commercial buildings and residential  Reinforce growth with supply chain and engineering cap

79. Slide 79: Finance Overview

    2017 Investor & Analyst Day Finance Overview Patrick Shannon, SVP & CFO

80. Slide 80: Financial Priorities to Drive Shareholder Value

    Financial Priorities to Drive Shareholder Value Accelerate Improve High Balanced Organic Operating Cash Flow Capital Growth Margins Conversion Allocation Total Shareholder Return 80 | 2017 Allegion Investor & Analyst Day

81. Slide 81: Operating Performance

    Operating Performance Organic Revenue Adjusted EBITDA Adjusted EPS¹ Growth¹ Margin¹ 5.3% 6.5% 15.3% CAGR CAGR CAGR $3.34 5.8% 22.4% $2.18 3.9% 20.6% 2013 2016 2013 2016 2013 2016  Industry-leading organic growth  Industry-leading EBITDA margins; Consistent and expanding over time  High level of c

82. Slide 82: Total Shareholder Return – Since Spin

    Total Shareholder Return – Since Spin 69% 38% 39% S&P 400 Cap Goods S&P 500 Allegion Substantially Exceeding Major Benchmarks 82 | 2017 Allegion Investor & Analyst Day Source: Calculations based on information in Factset for the period Dec. 1, 2013 - Feb. 15, 2017 and assumes dividends are reinveste

83. Slide 83: Capital Allocation Strategy

    Capital Allocation Strategy Leverage Management  Target 2.75-3.25x of gross Debt / Adj. EBITDA  End 2016: 2.9x of gross Debt / Adj. EBITDA1 Organic Growth Shareholder M&A Investment Distribution  Expand core portfolio  Product / market  Q1 2017: Quarterly and channel capability expansion divide

84. Slide 84: Disciplined Capital Allocation Usage

    Disciplined Capital Allocation Usage % of Operating Cash Flow  Capital Expenditures 2017 - 2019  Support growth and sustain business  Debt Repayments Cap Ex ~10%  Based on terms of credit facility  Dividends Dividends Additional ~15% - 20%  Subject to board approval Capital Deployment  Additi

85. Slide 85: Organic Growth

    Organic Growth New Product Channel Development Management  Engineering / R&D  Feet on the Street  Product Launches  Demand Creation Drive Above-Market Growth Increase Vitality Index Investment Self Funding; High ROIC Standardized Process, Prioritization & Post-Implementation Review 85 | 2017 All

86. Slide 86: Margin Expansion

    Margin Expansion  Incremental investment accelerates organic revenue growth above market  Level of investment dependent on market opportunities (size, capability, complexity)  Aligned with disciplined and balanced capital allocation methodology  ~40%+ incremental operating profit on every dollar

87. Slide 87: M&A Platforms / Thresholds

    M&A Platforms / Thresholds Platforms Key Acquisition Criteria  Aligned with strategic direction and core competencies  Strong business and market fundamentals  Leadership position and Expand Product ability to scale Portfolio  Clear synergy opportunities Emerging  Financial Technology  Return

88. Slide 88: Historical Adjusted EBITDA Margins

    Historical Adjusted EBITDA Margins Consistent EBITDA Margin Performance; Record Performance in 2016 (1) EBITDA defined as operating income plus depreciation and amortization. (2) EBITDA Margin for 2008-2013 calculated using revenue adjusted for Asia joint venture order flow change. 2000 - 2007 repre

89. Slide 89: Strong Cash Flow Generation

    Strong Cash Flow Generation ($ millions) 2014-2016: 27.1% CAGR Target ACF ~100% of Net Earnings Over Time 89 | 2017 Allegion Investor & Analyst Day (1) ACF is cash from continuing operating activities less capital expenditures

90. Slide 90: 2017 Guidance

    2017 Guidance Organic Revenue Growth1 Americas EMEIA Asia Pacific Total Total: 7% to 8% Total: -1% to 1% Total: 7% to 9% Total: 5.5% to 6.5% Organic: 6% to 7% Organic: 1% to 3% Organic: 10% to 12% Organic: 5.5% to 6.5% Earnings Per Share 2016 Reported EPS from Continuing Operations $2.36 Assumptions

91. Slide 91: Financial Targets

    Financial Targets Three-Year Financial Targets 2017-2019* Organic Revenue  Improving market fundamentals 4 - 6% CAGR Growth1  Incremental investments accelerating organic revenue growth above market EBITDA Margin Greater than  Leverage on incremental volume +200 bps  Net of investments EPS Growt

92. Slide 92: Total Shareholder Return – Long Term

    Total Shareholder Return – Long Term ~13% 4 - 6% Organic ~12% Revenue ~10% Growth Total Organic Earnings Shareholder Operating ~2% Return + 200 bps Margin Acquisition Per Share ~1% Income & Growth & & Share Dividend Market EPS Expansion Repurchase Yield Positioned Well to Deliver Strong Shareholder

93. Slide 93: Appendix

    ALLEGION PIONEERING SAFETY™

94. Slide 94: Segment Operating Income & EBITDA Reconciliation

    Segment Operating Income & EBITDA Reconciliation Americas EMEIA Asia Pacific 2013 2016 2014 2015 2016 2013 2014 2015 2016 Revenue $ 1,514.7 $ 1,645.7 $ 393.4 $ 386.3 $ 485.9 $ 153.5 $ 164.9 $ 123.4 $ 106.4 Asia Joint Venture Revenue (52.0) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Adjusted Revenue 1,462.7 1,6

95. Slide 95: Consolidated Operating Income & EBITDA Reconciliation

    Consolidated Operating Income & EBITDA Reconciliation 2008 2009 2010 2011 2012 2013 2014 2015 2016 Revenue $ 2,413.9 $ 2,006.7 $ 1,942.4 $ 1,998.3 $ 2,023.3 $ 2,069.6 $ 2,118.3 $ 2,068.1 $ 2,238.0 Asia Joint Venture Revenue (65.3) (64.5) (68.9) (58.6) (78.0) (52.0) 0.0 0.0 0.0 Adjusted Revenue 2,348

96. Slide 96: Reported EPS to Adjusted EPS

    Reported EPS to Adjusted EPS Year ended December 31, 2013 Year ended December 31, 2016 Reported Adjustments Adjusted Reported Adjustments Adjusted Net revenues $ 2,069.6 $ (52.0) $ 2,017.6 $ 2,238.0 $ - $ 2,238.0 Operating income 240.8 127.7 368.5 425.5 13.5 439.0 Operating margin 11.6% 18.3% 19.0%

97. Slide 97: About Allegion

    About Allegion™ Allegion (NYSE: ALLE) is a global pioneer in safety and security, with leading brands like CISA®, Interflex®, LCN®, Schlage®, SimonsVoss® and Von Duprin ®. Focusing on security around the door and adjacent areas, Allegion produces a range of solutions for homes, businesses, schools a

Allegion — Investor Day (March 2017) on 6ix