Allegion Plc · NYSE:ALLE

Allegion — 2016 Vertical Research Partners Industrial Conference

20 slides from Allegion's conference presentation, Sep 7, 2016

1. Slide 1: 2016 Allegion Overview

   2016 Vertical Research Partners Industrial Conference 2016 Allegion Overview Pioneering Security Around the World David D. Petratis, Chairman, President & CEO September 7, 2016

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 2016 financial performance, the Company’s growth strategy, the Company’s capital allocation strategy, the Compa

3. 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

4. Slide 4: Global Reach

   Global Reach $2,068 Million in 2015 Revenue 10,000+ Channel Partners 4

5. Slide 5: Our Brands

   Our Brands Enterprise Brand Corporate Brands A Long Legacy of Excellence 5

6. 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

7. 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

8. 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

9. Slide 9: EMEIA Business Transformation

   EMEIA Business Transformation Restructuring / Transform EMEIA Business Adjusted1 Operating Margin (%)  Exited unprofitable ~10% 10%+ business 7.9%  Resized regional headquarters 4.1%  Delivered operational efficiency 1.2%  Improved customer delivery/profitability 2013A 2014A 2015A 2016F Improved

10. Slide 10: Capital Allocation Strategy

    Capital Allocation Strategy Leverage Management  Target 2.75-3.25x of gross Debt/Adj. EBITDA  Upgraded to investment grade by S&P during the second quarter 2016  June 30, 2016: 3.0x of gross Debt/Adj. EBITDA1 Organic Growth Shareholder M&A Investment Distribution  Expand core portfolio  Product

11. Slide 11: 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

12. Slide 12: 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

13. Slide 13: 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

14. Slide 14: 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

15. Slide 15: 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 15

16. Slide 16: 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

17. Slide 17: Appendix

    ALLEGION’

18. Slide 18: Adjusted EBITDA Reconciliation

    Adjusted EBITDA Reconciliation LTM ( in USD Millions) 2008 2009 2010 2011 2012 2013 2014 2015 6/30/16 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 $ 2,177.0 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,

19. Slide 19: 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% $

20. Slide 20: 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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