Slide 1: Fourth-Quarter 2017 Results
Allegion Fourth-Quarter 2017 Results February 20, 2018
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 2018 financial performance, the Company’s growth strategy, the Company’s capital allocation strategy, the Compa
Slide 3: Safe Harbor
Safe Harbor The Company defines the presented non-GAAP measures as follows: Adjustments to revenue, operating income, operating margin, net earnings, EPS and EBITDA include items such as goodwill impairment charges, restructuring charges, asset impairments, merger and acquisitions costs, debt refi
Slide 4: Fourth-Quarter Financial Highlights
Fourth-Quarter Financial Highlights Revenue of $623.0 million increased +9.4%, +6.1% on an organic basis Americas organic revenue growth +4.8% EMEIA organic revenue growth +7.7% Asia Pacific organic revenue growth +16.4% Adjusted operating income of $135.4 million; adjusted operating margi
Slide 5: 2017 Allegion Accomplishments
2017 Allegion Accomplishments Continued focus and improvement on exceptional safety record for TRIR1 and LTIR2; Continue to be a safety leader Recognized for safety record by National Safety Council in January 2018 Recognized as one of the best run companies by Wall Street Journal in December
Slide 6: Opportunistic Acquisitions
Opportunistic Acquisitions Leading Brands – Natural Portfolio Extensions – Leverage Spec Writing Capability Acquisition of U.S. manufacturer of fire-rated glass and frames for doors, entrances and curtain walls Acquisition of Middle Eastern manufacturer of commercial steel and wood doors and fra
Slide 7: 2017 Allegion Revenue Results
2017 Allegion Revenue Results Q4 Q4 FY FY Q4-17 Reported Organic Reported Organic Growth Growth Growth Growth Price 1.3% Americas 6.4% 4.8% 7.4% 5.8% Volume 4.8% EMEIA 16.5% 7.7% 7.7% 4.7% Organic 6.1% Asia Pacific 19.1% 16.4% 10.2% 7.7% Acquisition 0.9% Currency 2.4% Total 9.4% Total Allegion 9.4%
Slide 8: Fourth-Quarter 2017 Allegion Results
Fourth-Quarter 2017 Allegion Results Revenue Adjusted Operating Income ($millions) ($millions) Q4 Revenue Performance Q4 Adjusted Operating Margin +380bps Total reported growth +9.4%; organic growth +6.1% Margin improvement in all regions Strong organic growth in all regions attributed to Pr
Slide 9: Fourth-Quarter 2017 Allegion EPS Performance
Fourth-Quarter 2017 Allegion EPS Performance Q4 Tax Reform ($0.56) Debt Refinancing ($0.40) Restructure / M&A Costs ($0.05) Interest $0.03 Other, Net / NCI $0.02 9 | Fourth-Quarter 2017 Results
Slide 10: Fourth-Quarter 2017 Americas Results
Fourth-Quarter 2017 Americas Results Revenue Adjusted Operating Income ($millions) ($millions) Q4 Revenue Performance Q4 Adjusted Operating Margin +480bps Total reported growth +6.4%; organic growth +4.8% Volume leverage, price and productivity more Mid-single digit growth in both non-resident
Slide 11: Fourth-Quarter 2017 EMEIA Results
Fourth-Quarter 2017 EMEIA Results Revenue Adjusted Operating Income ($millions) ($millions) Q4 Revenue Performance Q4 Adjusted Operating Margin +100bps Total reported growth +16.5%; organic growth Margin expansion driven by price, volume +7.7% leverage, FX tailwinds, partially offset by Solid
Slide 12: Fourth-Quarter 2017 Asia-Pacific Results
Fourth-Quarter 2017 Asia-Pacific Results Revenue Adjusted Operating Income ($millions) ($millions) Q4 Revenue Performance Q4 Adjusted Operating Margin +540bps Total reported growth +19.1%; organic growth Leverage on incremental volume and +16.4% productivity more than offset inflation and Orga
Slide 13: Full-Year 2017 Allegion ACF
Full-Year 2017 Allegion ACF Available Cash Flow1 ($millions) 2017 ACF of $297.9 million decreased $37.1 million driven by a $50M discretionary pension payment, made in Q1 2017, partially offset by increased earnings Working Capital2 and Cash Conversion Cycle (CCC)3 1 Net cash from operating activi
Slide 14: Impact of U.S. Tax Reform
Impact of U.S. Tax Reform 2017 Impact $53.5 million charge recorded in Q4 largely driven by a non-cash deferred tax asset revaluation resulting from the reduction in U.S. statutory tax rates and the uncertainty of future realizability of certain deferred tax assets Minimal $5 million repatriat
Slide 15: Full-Year 2018 Allegion Revenue Guidance
Full-Year 2018 Allegion Revenue Guidance Region Revenue Change1 Markets Americas U.S. non-residential and residential markets remain solid at low- to mid-single digits Total: 10% to 11% Organic: 4% to 5% Electromechanical continues to outpace mechanical Total growth inclusive of TGP and AD Sys
Slide 16: Full-Year 2018 Allegion EPS Guidance
Full-Year 2018 Allegion EPS Guidance 2017 Reported EPS $2.85 Adjustments $1.11 2017 Adjusted EPS $3.96 Operational Improvements (Growth/OPEX) $0.32 to $0.44 Investments ($0.10) Tax Rate $0.03 Interest , Other Flat FX $0.03 Acquisitions $0.11 to $0.14 2018 Adjusted EPS $4.35 to $4.50 Adjustments¹ ($0
Slide 17: Summary
Summary Delivered strong 2017 full-year organic revenue growth of +5.7% Continued progress on vitality index Increased 2017 full-year adjusted operating margins +140 bps (+70 bps excluding impact from 2016 environmental remediation charge of $15 million) Strong cash generation, increasing af
Slide 18: Appendix
ALLEGION’
Slide 19: Full-Year 2017 Allegion EPS Performance
Full-Year 2017 Allegion EPS Performance Full Year Tax Reform ($0.56) Debt Refinancing ($0.41) Restructure / M&A Costs ($0.14) Interest $0.03 Other, Net / NCI ($0.07) 19 | Fourth-Quarter 2017 Results
Slide 20: Operating Trends
Operating Trends Revenue Adjusted Operating Income Growth CAGR +230 bps 4.4% Total Margin 2,500 5.6% Organic 600 Improvement 22% 2,400 500 21% 2,300 400 21.0% 19.6% 20% 2,200 300 19.2% 2,100 18.7% 19% 200 2,000 100 18% 1,900 396 397 439 507 2,118 2,068 2,238 2,408 1,800 0 17% 2014 2015 2016 2017 201
Slide 21: ALLEGION
| i. ALLEGION