Allegion Plc · NYSE:ALLE

Allegion — Q4 2016 Earnings Presentation

20 slides from Allegion's earnings presentation, Feb 9, 2017

  1. Slide 1: Allegion Fourth-Quarter 2016 Results

    Allegion Fourth-Quarter 2016 Results February 9, 2017

  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 strategy, the Company’s capital allocation strategy, the Compa

  3. Slide 3: Safe Harbor

    Safe Harbor 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 such as go

  4. Slide 4: Fourth-Quarter Financial Highlights

    Fourth-Quarter Financial Highlights  Revenue of $569.7 million increased +4.4%, +5.2% on an organic basis1  Americas organic revenue growth +7.0%  EMEIA organic revenue growth +1.4%  Asia Pacific organic revenue declined 0.7%  Adjusted2 operating income of $102.0 million inclusive of $15M envir

  5. Slide 5: 2016 Allegion Accomplishments

    2016 Allegion Accomplishments  Exceptional Safety Record: TRIR1 of 0.52; LTIR2 of 0.25; Continue to be a safety leader  Organic revenue growth globally of 5.8%  Continued growth from channel initiatives and new products increasing vitality index  Expanded adjusted operating margins in all region

  6. Slide 6: 2016 Product Launches & Vitality Index

    2016 Product Launches & Vitality Index 6 | Fourth-Quarter 2016 Results

  7. Slide 7: 2016 Allegion Revenue Results

    2016 Allegion Revenue Results Solid Organic Growth; Headwinds from Currency 1Organic excludes acquisitions/divestments and currency impacts 7 | Fourth-Quarter 2016 Results

  8. Slide 8: Fourth-Quarter 2016 Allegion Results

    Fourth-Quarter 2016 Allegion Results Revenue Adjusted Operating Income(1) ($millions) ($millions) Q4 Revenue Performance Q4 Adjusted Operating Margin -110bps  Total growth +4.4%; organic growth +5.2%  Year-over-year margin is down due to $15 million or -260 bps environmental  Strong organic growt

  9. Slide 9: Fourth-Quarter 2016 Allegion EPS Performance

    Fourth-Quarter 2016 Allegion EPS Performance Q4 Interest $0.01 Other ($0.08) 9 | Fourth-Quarter 2016 Results

  10. Slide 10: Fourth-Quarter 2016 Americas Results

    Fourth-Quarter 2016 Americas Results Revenue Adjusted Operating Income(1) ($millions) ($millions) Q4 Revenue Performance Q4 Adjusted Operating Margin -260bps  Total reported and organic growth +7.0%  Strong volume leverage, price, favorable mix and productivity more than offset inflation  Improve

  11. Slide 11: Fourth-Quarter 2016 EMEIA Results

    Fourth-Quarter 2016 EMEIA Results Revenue Adjusted Operating Income(1) ($millions) ($millions) Q4 Revenue Performance Q4 Adjusted Operating Margin +180bps  Total growth +0.2%; organic growth +1.4%  Margin expansion driven by price and productivity, which more than offset FX  Overall growth driven

  12. Slide 12: Fourth-Quarter 2016 Asia Pacific Results

    Fourth-Quarter 2016 Asia Pacific Results Revenue Adjusted Operating Income(1) ($millions) ($millions) Q4 15 Q4 16 Syst Integration -0.7 - Mech/Elec Hdw 2.9 2.3 Total 2.2 2.3 Q4 Revenue Performance Q4 Adjusted Operating Margin +100bps  Total revenue declined -8.5%; organic revenue  Favorable year-o

  13. Slide 13: Full-Year 2016 Allegion ACF

    Full-Year 2016 Allegion ACF Available Cash Flow 1 ($millions)  2016 FY ACF of $335.0 million is $112.8 million, or 50.8% percent higher than prior year  Increase in ACF primarily due to higher net earnings Working Capital 2 and Cash Conversion Cycle(CCC)3 2016 FY ACF of $335.0 Million Exceeded Gui

  14. Slide 14: 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 M&A Shareholder Investment Distribution  Expand core portfolio  Product/market  Q1 2017 quarterly and channel capability expansion and dividend

  15. Slide 15: Full-Year 2017 Allegion Revenue Guidance

    Full-Year 2017 Allegion Revenue Guidance Region Revenue Change1 Markets Americas  U.S. non-residential growing mid-single digits driven by strong institutional and commercial verticals Total: 7% to 8%  U.S. residential growing mid-single digits, driven by both Organic: 6% to 7% builder and retail

  16. Slide 16: Full-Year 2017 Allegion EPS Guidance

    Full-Year 2017 Allegion EPS Guidance 2016 Reported EPS from Continuing Operations $2.36 Adjustments (see press release for non-GAAP reconciliations) $0.98 2016 Adjusted EPS from Continuing Operations $3.34 Operational Improvements (Growth/OPEX) $0.55 to $0.60 Investments ($0.15) to ($0.20) Interest,

  17. Slide 17: Summary

    Summary  Delivered strong 2016 full-year organic revenue growth of +5.8% driven by market and growth initiatives; solid progress on vitality index  Increased 2016 full-year adjusted operating margins +40 bps (including -70 basis point impact from environmental remediation charge of $15 million) 

  18. Slide 18: Appendix

    ALLEGION’

  19. Slide 19: Full Year 2016 Allegion EPS Performance

    Full Year 2016 Allegion EPS Performance Full Year Interest ($0.10) Other $0.07 NCI ($0.01) (1) (1) Other includes VZ inventory impairment, VZ devaluation and loss from divestiture of VZ and system integration 19 | Fourth-Quarter 2016 Results

  20. Slide 20: ALLEGION

    | i. ALLEGION

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