Allegion Plc · NYSE:ALLE
Allegion — 2016 Goldman Sachs Leveraged Finance Conference
22 slides from Allegion's conference presentation, May 17, 2016
Slide 1: 2016 Allegion Overview
2016 Goldman Sachs Leveraged Finance Conference 2016 Allegion Overview Pioneering Security Around the World Patrick Shannon, Senior Vice President & CFO May 17, 2016
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 2016 financial performance, the Company’s growth strategy, the Company’s capital allocation strategy, the Compa
Slide 3: 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 conversion performance Broad distribution network Bala
Slide 4: Global Reach
Global Reach $2,068 Million in 2015 Revenue 10,000+ Channel Partners 4
Slide 5: Our Brands
Our Brands Enterprise Brand Corporate Brands A Long Legacy of Excellence 5
Slide 6: What We Sell
What We Sell Secure the Door Control the Door Protect the Door Portable Security Exit devices Door closers Kick plates Padlocks Mechanical locks Automatic Door pulls Cable locks Key systems operators Edge guards Bike locks Electronic locks Coordinators Readers Credentia
Slide 7: Leading Electro-Mechanical Convergence
Leading Electro-Mechanical Convergence Residential Commercial 4 7. aptiQ Mobile 1. AXA Remote 3 5 2.0 Window Opener 8. CISA eSIGNO 2 6 2. Milre Rim Lock 9. Interflex eVAYO 430 SD WLAN Reader 3. Schlage 1 7 10. Schlage AD-400 (China) SEL 420 Electronic Residential 11. Schlage L909x Anti-burglary Lock
Slide 8: Key Strategies
Key Strategies Innovation in Opportunistic Expand in Existing & New Core Markets Acquisitions Product Categories Channel management Accelerate new product Emerging markets and demand creation development / vitality Emerging technology Commercial retrofit and index Expand product portfoli
Slide 9: EMEIA Business Transformation
EMEIA Business Transformation Restructuring / Transform EMEIA Business Adjusted1 Operating Margin (%) 10%+ Exited unprofitable business 7.9% Resized regional headquarters 4.1% Delivered operational efficiency 1.2% Improved customer delivery/profitability 2013A 2014A 2015A 2016F Improved Oper
Slide 10: Capital Structure & Liquidity
Capital Structure & Liquidity March 31, 2016 Debt Maturity Profile ($ millions) ($ millions) Total Cash $ 126 Total Debt $ 1,496 Debt/Adj. EBITDA1 3.3x S&P Rating BB+ Positive $500 million revolving credit facility in place Moody’s Rating Ba1 Stable Strong Liquid Position, Minimal Short-term Debt
Slide 11: Capital Allocation Strategy
Capital Allocation Strategy Leverage Management Target 2.75-3.25x of gross Debt/Adj. EBITDA Continued EBITDA growth and debt amortization will reduce leverage to target Q1 2016: 3.3x of gross Debt/Adj. EBITDA range in 2016 Organic Growth Shareholder M&A Investment Distribution Expand core po
Slide 12: Capital Allocation Usage
Capital Allocation Usage Debt amortization based on terms of credit facility Organic growth investment Annualized dividends subject Mergers and to board approval acquisitions Opportunistic share repurchase Share repurchase to offset dilution Significant Capital Available for Strategic De
Slide 13: Organic Investments
Organic Investments New Product Channel Infrastructure Development Management Engineering / R&D Feet on the Street IT Systems Product Launches Demand Creation Tax Enterprise Excellence Accelerate revenue Reduce cost structure Investment return / realization in 1-3 years Standardized Pr
Slide 14: M&A Platforms / Thresholds
M&A Platforms / Thresholds Platforms Key Acquisition Criteria Aligned with strategic direction and in our core − Strong business and market fundamentals Expand Product Portfolio − Targets with leadership position and ability to scale Emerging Technology − Clear synergy opportunities Return on In
Slide 15: Historical Adjusted EBITDA Margins
Historical Adjusted EBITDA Margins ¹ Adjusted EBITDA defined as operating income plus depreciation and amortization, excluding discontinued operations, net of tax, other expense, net, goodwill impairment charges, gains on the sale of property, charges related to the devaluation of the Venezuelan bol
Slide 16: Strong Cash Flow Generation
Strong Cash Flow Generation ($ millions) 2016 Target: $280-$300 Million Stable & Consistent Cash Generation 1ACF is cash from continuing operating activities less capital expenditures 16
Slide 17: Summary
Summary Executing strategy, delivering on commitments Delivering solid organic revenue growth Implementing successful M&A integrations Increasing operating margins net of incremental investments Continuing to invest in new products and channel development Driving EMEIA transformation to
Slide 18: Appendix
ALLEGION’
Slide 19: Debt & Credit Facility Structure
Debt & Credit Facility Structure $300mm 5.875% Senior Notes due 20231 Allegion plc (Ireland) Term loan facility, $927mm outstanding at Dec. 31, 20151 (Issuer/Guarantor) $500mm revolving credit facility1 Allegion US Holding Various Foreign $300mm 5.75% Senior Notes due 20212 Company Inc. (U.S.) Subsi
Slide 20: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation ( in USD Millions) 2008 2009 2010 2011 2012 2013 2014 2015 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 Asia Joint Venture Revenue (65.3) (64.5) (68.9) (58.6) (78.0) (52.0) 0.0 0.0 Adjusted Revenue 2,348.6 1,942.2 1,873.5 1,93
Slide 21: EMEIA Adjusted Operating Income Non-GAAP Reconciliation
EMEIA Adjusted Operating Income Non-GAAP Reconciliation Year Ended Decem ber 31, 2013 Year Ended Decem ber 31, 2014 Year Ended Decem ber 31, 2015 As Reported Margin As Reported Margin As Reported Margin EMEIA Net revenues $ 425.3 $ 393.4 $ 386.3 Operating income (GAAP) $ (140.7) (33.1%) $ 4.9 1.2% $
Slide 22: 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 an
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