Allegion (NYSE: ALLE) Reports Q2-2024 Financial Results

Rhea-AI Summary

Allegion (NYSE: ALLE) reported strong Q2-2024 financial results, raising its full-year outlook. Key highlights include:

- Net earnings per share (EPS) of $1.77, up 9.9% YoY
- Adjusted EPS of $1.96, up 11.4% YoY
- Revenues of $965.6 million, up 5.8% on a reported basis and 5.2% organically
- Operating margin of 21.6%, compared to 20.2% in Q2-2023
- Adjusted operating margin of 23.7%, up 150 basis points YoY

The company raised its full-year reported revenue growth outlook to 2.5-3.5% and adjusted EPS to $7.15-$7.30. Allegion's performance was driven by strong execution, price realization, and volume growth across its Americas and International segments.

Positive

• Q2 revenue increased 5.8% to $965.6 million, with 5.2% organic growth
• Adjusted EPS grew 11.4% to $1.96
• Adjusted operating margin expanded 150 basis points to 23.7%
• Full-year reported revenue growth outlook raised to 2.5-3.5%
• Full-year adjusted EPS outlook raised to $7.15-$7.30
• Americas segment revenues up 6.0%, with non-residential business growing mid-single digits
• International segment revenues increased 5.2%, with 3.1% organic growth

Negative

• Year-to-date available cash flow decreased by $14.1 million compared to the prior-year period
• Interest expense increased by $1.4 million to $25.1 million in Q2

Insights

Financial Analyst

Allegion's Q2 2024 financial results clearly demonstrate robust performance. The company has reported EPS of $1.77, a 9.9% increase and Adjusted EPS of $1.96, up 11.4% from the previous year. This rise in EPS is a positive indicator for investors, reflecting improved profitability and efficient cost management.

The notable 5.8% increase in revenues signals strong market demand and effective pricing strategies. The company's ability to raise its full-year revenue growth forecast to 2.5% to 3.5% and its adjusted EPS outlook to $7.15 to $7.30 is a testament to its confidence in sustained performance. The improved operating margin of 21.6% further supports this view by indicating operational efficiencies and strong price realization.

For retail investors, these results suggest that Allegion is well-positioned for steady growth. The consistent return of cash to shareholders through share repurchases and dividends also adds to the stock's attractiveness. In the short-term, the market is likely to respond positively to these strong financials and raised guidance. Long-term investors can find reassurance in Allegion's strategic capital deployment and resilience in its business model.

Market Research Analyst

Allegion's performance can be seen as a reflection of strong market demand across its segments. The company's Americas segment saw a 6.0% increase in revenues, driven by both price realization and volume growth. This indicates a healthy demand environment, both in the residential and non-residential sectors.

Internationally, the 5.2% increase in revenues is bolstered by strategic acquisitions contributing 3.2% to growth. However, the 1.1% headwind from foreign currency should be noted as a potential ongoing risk for international operations. Despite this, the overall growth trajectory remains positive thanks to effective pricing strategies and volume growth.

Investors should observe Allegion's ability to leverage acquisitions for growth and manage foreign currency risks. The company's focus on niche markets and segments, plus its specification expertise, positions it well for continued success. The raised financial outlook further signifies management’s confidence in these strategies bearing fruit.

Strong execution drives second-quarter performance; Company raises full-year outlook

Quarterly Financial Highlights

(All comparisons against the second quarter of 2023, unless otherwise noted)

• Net earnings per share (EPS) of $1.77, up 9.9% compared with $1.61; Adjusted EPS of $1.96, up 11.4% compared with $1.76
• Revenues of $965.6 million, up 5.8% on a reported basis and up 5.2% on an organic basis
• Operating margin of 21.6%, compared with 20.2%; Adjusted operating margin of 23.7%, up 150 basis points compared with 22.2%

Full-Year Outlook Highlights

• Raising full-year reported revenue growth to a range of 2.5% to 3.5%
• Raising full-year adjusted EPS outlook to a range of $7.15 to $7.30
• Affirming available cash flow outlook

DUBLIN--(BUSINESS WIRE)-- Allegion plc (NYSE: ALLE), a leading global security products and solutions provider, today reported financial results for its second quarter (ended June 30, 2024).

“Strong execution by the entire Allegion team drove record Q2 revenue and adjusted EPS,” said Allegion President and CEO John H. Stone.

“Q2 revenue growth and margin expansion demonstrate the resilience of Allegion’s business model. We see stability in demand given our broad end-market exposure and specification expertise. We are accelerating capital deployment, consistently returning cash to shareholders and investing in accretive acquisitions like Krieger Specialty Products and Unicel Architectural.”

“We’re raising our full-year guidance for reported revenue and adjusted EPS, and we’re affirming our available cash flow outlook. I’m proud of how the Allegion team lives our values while driving results for our customers and shareholders.”

Company Results

(All comparisons against the second quarter of 2023, unless otherwise noted)

Allegion reported second-quarter 2024 net revenues of $965.6 million and net earnings of $155.4 million, or $1.77 per share. Adjusted net earnings were $171.7 million, or $1.96 per share, up 11.4%, excluding charges related to restructuring, acquisition and integration costs, a non-cash impairment charge, as well as amortization expense related to acquired intangible assets.

Second-quarter 2024 net revenues increased 5.8%. Net revenues increased 5.2% on an organic basis, excluding impacts of acquisitions, divestitures and foreign currency movements. The organic revenue increase was driven by price realization and volume growth. Reported revenue reflects a 0.9% positive impact from acquisitions and a modest headwind from foreign currency.

Second-quarter 2024 operating income was $209.0 million, an increase of $24.4 million or 13.2%. Adjusted operating income in second-quarter 2024 was $228.6 million, an increase of $26.0 million or 12.8%.

Second-quarter 2024 operating margin was 21.6%, compared with 20.2%. The adjusted operating margin in second-quarter 2024 was 23.7%, compared with 22.2%. The 150-basis-point increase in adjusted operating margin is attributable to positive price and productivity net of inflation and investments as well as favorable volume leverage.

Segment Results

(All comparisons against the second quarter of 2023, unless otherwise noted)

The Americas segment revenues were up 6.0% (up 5.7% on an organic basis). The organic revenue increase was driven by price realization as well as volume growth. The non-residential business was up mid-single digits, and the residential business grew low-single digits. The reported revenue reflects a positive impact from acquisitions.

The International segment revenues increased 5.2% (up 3.1% on an organic basis). The organic revenue increase was driven by price realization and volume growth. Reported revenue reflects a positive impact from acquisitions of 3.2%, partially offset by a 1.1% headwind in foreign currency.

Additional Items

(All comparisons against the second quarter of 2023, unless otherwise noted)

Interest expense for second-quarter 2024 was $25.1 million, an increase of $1.4 million.

Other income, net for second-quarter 2024 was $5.1 million, compared to other income, net of $1.6 million.

The company’s effective tax rate for second-quarter 2024 was 17.8%, compared with 12.6%. The company’s adjusted effective tax rate for second-quarter 2024 was 18.2%, compared with 13.9%.

Cash Flow and Liquidity

Year-to-date available cash flow for 2024 was $176.0 million, a decrease of $14.1 million versus the prior-year period. The company ended second-quarter 2024 with cash and cash equivalents of $747.5 million, as well as total debt of $2,404.6 million.

Cash and debt balances include proceeds of $400.0 million from the May 2024 issuance of new 2034 senior notes, which will be used to repay the $400.0 million senior note maturity in the second half of 2024.

Share Repurchase and Dividends

In the second quarter of 2024, the company repurchased approximately 0.3 million shares for approximately $40 million and paid quarterly dividends of $0.48 per ordinary share or $41.8 million.

Updated Full-Year Outlook

(All comparisons against full-year 2023, unless otherwise noted)

The company is raising its revenue growth for full-year 2024, which is expected to be 2.5% to 3.5%, and tightening its organic revenue growth to be 1.5% to 2.5%, excluding the impacts of acquisition, divestitures and foreign currency movements.

The company is raising the outlook for full-year 2024 EPS and expects it to be in the range of $6.50 to $6.65, or $7.15 to $7.30 on an adjusted basis. The outlook assumes a headwind of approximately $0.37 based on a full-year adjusted effective tax rate of 18.0% to 19.0%, inclusive of the estimated impacts of global minimum tax.

Adjustments to 2024 EPS include estimated impacts of approximately $0.52 per share for acquisition-related amortization, as well as $0.13 per share for M&A, restructuring and other.

The outlook assumes an average diluted share count for the full year of approximately 87.7 million shares.

The company affirms expected full-year available cash flow of approximately $540 to $570 million.

Conference Call Information

On Wednesday, July 24, 2024, President and CEO John H. Stone and Senior Vice President and Chief Financial Officer Mike Wagnes will conduct a conference call for analysts and investors, beginning at 8 a.m. ET, to review the company's results.

A real-time, listen-only webcast of the conference call will be broadcast live online. Individuals wishing to listen may access the call through the company's website at https://investor.allegion.com.

About Allegion

Allegion (NYSE: ALLE) is a global pioneer in seamless access, with leading brands like CISA^®, Interflex^®, LCN^®, Schlage^®, SimonsVoss^® and Von Duprin^®. Focusing on security around the door and adjacent areas, Allegion secures people and assets with a range of solutions for homes, businesses, schools and institutions. Allegion had $3.7 billion in revenue in 2023, and its security products are sold around the world. For more, visit www.allegion.com.

Non-GAAP Measures

This news release includes adjusted non-GAAP financial information which should be considered supplemental to, not a substitute for or superior to, the financial measure calculated in accordance with GAAP. The company presents operating income, operating margin, effective tax rate, net earnings and diluted earnings per share (EPS) on both a U.S. GAAP basis and on an adjusted (non-GAAP) basis, revenue growth on a U.S. GAAP basis and organic revenue growth on a non-GAAP basis, EBITDA, adjusted EBITDA and adjusted EBITDA margin (all non-GAAP measures) and Available Cash Flow (“ACF,” a non-GAAP measure), including in certain cases, on a segment basis. The company presents these non-GAAP measures because management believes these non-GAAP measures provide management and investors useful perspective of the company’s underlying business results and trends and a more comparable measure of period-over-period results. These measures are also used to evaluate senior management and are a factor in determining at-risk compensation. Investors should not consider non-GAAP measures as alternatives to the related U.S. GAAP measures. Further information about the adjusted non-GAAP financial tables is attached to this news release. The 2024 Full Year Outlook contains non-GAAP financial measures that exclude or otherwise have been adjusted for non-GAAP adjustment items from our U.S. GAAP financial statements. When we provide forward-looking outlooks for any of the various non-GAAP metrics described above, we do not provide reconciliations of the U.S. GAAP measures as we are unable to predict with a reasonable degree of certainty the actual impact of the non-GAAP adjustment items. By their very nature, non-GAAP adjustment items are difficult to anticipate with precision because they are generally associated with unexpected and unplanned events that impact our company and its financial results. Therefore, we are unable to provide a reconciliation of these measures without unreasonable efforts.

Forward-Looking Statements

This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934, including, but not limited to, statements under the headings “Full-Year Outlook Highlights,” “Affirmed Full-Year Outlook” and statements regarding the company's 2024 and future financial performance, the company’s business plans and strategy, the company’s growth strategy, the company’s capital allocation strategy, the company’s ability to successfully complete and integrate acquisitions and achieve anticipated strategic and financial benefits and the performance of the markets in which the company operates. These forward-looking statements generally are identified by the words “believe,” “aim,” “project,” “expect,” “anticipate,” “estimate,” “forecast,” “outlook,” “intend,” “strategy,” “future,” “opportunity,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result” or the negative thereof or variations thereon or similar expressions generally intended to identify forward-looking statements. Forward-looking statements may relate to such matters as projections of revenue, margins, expenses, tax rate and provisions, earnings, cash flows, benefit obligations, dividends, share purchases or other financial items; any statements of the plans, strategies and objectives of management for future operations, including those relating to any statements concerning expected development, performance or market share relating to our products and services; any statements regarding future economic conditions or our performance; any statements regarding pending investigations, claims or disputes; any statements of expectation or belief; and any statements of assumptions underlying any of the foregoing. Undue reliance should not be placed on any forward-looking statements, as these statements are based on the company's currently available information and our current assumptions, expectations and projections about future events. They are subject to future events, risks and uncertainties - many of which are beyond the company’s control - as well as potentially inaccurate assumptions, that could cause actual results to differ materially from those in the forward-looking statements. Important factors and other risks that may affect the company's business or that could cause actual results to differ materially are included in filings the company makes with the Securities and Exchange Commission from time to time, including its Annual Report on Form 10-K and its Quarterly Reports on Form 10-Q and in its other SEC filings. All forward-looking statements in this press release are expressly qualified by such cautionary statements and by reference to the underlying assumptions. The company undertakes no obligation to update these forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

ALLEGION PLC Condensed and Consolidated Income Statements (In millions, except per share data)   UNAUDITED
	Three months ended June 30,								Six months ended June 30,
		2024				2023				2024				2023
Net revenues	$	965.6			$	912.5			$	1,859.5			$	1,835.5
Cost of goods sold		537.3				510.6				1,039.8				1,042.6
Gross profit		428.3				401.9				819.7				792.9
Selling and administrative expenses		219.3				217.3				438.6				437.3
Operating income		209.0				184.6				381.1				355.6
Interest expense		25.1				23.7				48.0				47.3
Other income, net		(5.1	)			(1.6	)			(8.8	)			(1.9	)
Earnings before income taxes		189.0				162.5				341.9				310.2
Provision for income taxes		33.6				20.5				62.7				44.6
Net earnings		155.4				142.0				279.2				265.6
Less: Net earnings attributable to noncontrolling interests		—				—				—				0.1
Net earnings attributable to Allegion plc	$	155.4			$	142.0			$	279.2			$	265.5
Basic earnings per ordinary share
attributable to Allegion plc shareholders:	$	1.78			$	1.62			$	3.19			$	3.02
Diluted earnings per ordinary share
attributable to Allegion plc shareholders:	$	1.77			$	1.61			$	3.18			$	3.01
Shares outstanding - basic		87.3				87.9				87.5				88.0
Shares outstanding - diluted		87.7				88.3				87.9				88.3

ALLEGION PLC Condensed and Consolidated Balance Sheets (In millions)   UNAUDITED
	June 30, 2024			December 31, 2023
ASSETS
Cash and cash equivalents	$	747.5		$	468.1
Accounts and notes receivables, net		474.1			412.8
Inventories		444.6			438.5
Other current assets		49.6			41.5
Total current assets		1,715.8			1,360.9
Property, plant and equipment, net		370.5			358.1
Goodwill		1,488.3			1,443.1
Intangible assets, net		609.8			572.8
Other noncurrent assets		594.7			576.6
Total assets	$	4,779.1		$	4,311.5
LIABILITIES AND EQUITY
Accounts payable	$	253.6		$	259.2
Accrued expenses and other current liabilities		364.3			407.9
Short-term borrowings and current maturities of long-term debt		416.3			412.6
Total current liabilities		1,034.2			1,079.7
Long-term debt		1,988.3			1,602.4
Other noncurrent liabilities		331.3			311.1
Equity		1,425.3			1,318.3
Total liabilities and equity	$	4,779.1		$	4,311.5

ALLEGION PLC Condensed and Consolidated Statements of Cash Flows (In millions)   UNAUDITED
	Six months ended June 30,
		2024				2023
Operating Activities
Net earnings	$	279.2			$	265.6
Depreciation and amortization		59.5				55.5
Changes in assets and liabilities and other non-cash items		(114.6	)			(91.0	)
Net cash provided by operating activities		224.1				230.1
Investing Activities
Capital expenditures		(48.1	)			(40.0	)
Acquisition of businesses, net of cash acquired		(120.8	)			(28.6	)
Other investing activities, net		2.9				7.4
Net cash used in investing activities		(166.0	)			(61.2	)
Financing Activities
Net proceeds from (repayments of) debt		393.6				(36.3	)
Debt financing costs		(6.6	)			—
Dividends paid to ordinary shareholders		(83.8	)			(79.3	)
Repurchase of ordinary shares		(80.0	)			(19.9	)
Other financing activities, net		5.0				(2.9	)
Net cash from (used) in financing activities		228.2				(138.4	)
Effect of exchange rate changes on cash and cash equivalents		(6.9	)			4.1
Net increase in cash and cash equivalents		279.4				34.6
Cash and cash equivalents - beginning of period		468.1				288.0
Cash and cash equivalents - end of period	$	747.5			$	322.6

SUPPLEMENTAL SCHEDULES
ALLEGION PLC	SCHEDULE 1

SELECTED OPERATING SEGMENT INFORMATION (In millions)
	Three months ended June 30,								Six months ended June 30,
		2024				2023				2024				2023
Net revenues
Allegion Americas	$	770.7			$	727.2			$	1,480.0			$	1,468.1
Allegion International		194.9				185.3				379.5				367.4
Total net revenues	$	965.6			$	912.5			$	1,859.5			$	1,835.5
Operating income (loss)
Allegion Americas	$	214.3			$	195.4			$	401.3			$	382.0
Allegion International		17.7				13.9				30.7				24.5
Corporate unallocated		(23.0	)			(24.7	)			(50.9	)			(50.9	)
Total operating income	$	209.0			$	184.6			$	381.1			$	355.6

ALLEGION PLC	SCHEDULE 2
The Company presents operating income, operating margin, net earnings and diluted earnings per share (EPS) on both a U.S. GAAP basis and on an adjusted (non-GAAP) basis, revenue growth on a U.S. GAAP basis and organic revenue growth on a non-GAAP basis, EBITDA, adjusted EBITDA and adjusted EBITDA margin (all non-GAAP measures), and available cash flow ("ACF", a non-GAAP measure). The Company presents these non-GAAP measures because management believes they provide useful perspective of the Company’s underlying business results and trends and a more comparable measure of period-over-period results. These measures are also used to evaluate senior management and are a factor in determining at-risk compensation. Investors should not consider non-GAAP measures as alternatives to the related U.S. GAAP measures.   The Company defines the presented non-GAAP measures as follows: Adjustments to operating income, operating margin, net earnings, EPS and EBITDA include items such as goodwill, indefinite-lived trade name and other asset impairment charges, restructuring charges, acquisition and integration costs, amortization of acquired intangible assets, debt financing costs, gains or losses related to the divestiture of businesses or equity method investments and non-operating investment gains or losses; Organic revenue growth is defined as U.S. GAAP revenue growth excluding the impact of divestitures, acquisitions and currency effects; and ACF is defined as U.S. GAAP net cash from operating activities less capital expenditures. These non-GAAP measures may not be defined and calculated the same as similar measures used by other companies.

RECONCILIATION OF GAAP TO NON-GAAP NET EARNINGS   (In millions, except per share data)
	Three months ended June 30, 2024											Three months ended June 30, 2023
	Reported				Adjustments			Adjusted (non-GAAP)				Reported				Adjustments			Adjusted (non-GAAP)
Net revenues	$	965.6			$	—		$	965.6			$	912.5			$	—		$	912.5
Operating income		209.0				19.6	(1)		228.6				184.6				18.0	(1)		202.6
Operating margin		21.6	%						23.7	%			20.2	%						22.2	%
Earnings before income taxes		189.0				20.9	(2)		209.9				162.5				18.0	(2)		180.5
Provision for income taxes		33.6				4.6	(3)		38.2				20.5				4.6	(3)		25.1
Effective income tax rate		17.8	%						18.2	%			12.6	%						13.9	%
Net earnings attributable to Allegion plc	$	155.4			$	16.3		$	171.7			$	142.0			$	13.4		$	155.4
Diluted earnings per ordinary share attributable to
Allegion plc shareholders:	$	1.77			$	0.19		$	1.96			$	1.61			$	0.15		$	1.76

(1)		Adjustments to operating income for the three months ended June 30, 2024, consist of $4.7 million of restructuring charges and acquisition and integration expenses and $14.9 million of amortization expense related to acquired intangible assets. Adjustments to operating income for the three months ended June 30, 2023, consist of $4.3 million of restructuring charges and acquisition and integration expenses, and $13.7 million of amortization expense related to acquired intangible assets.
(2)		Adjustments to earnings before income taxes for the three months ended June 30, 2024, consist of the adjustments to operating income discussed above, as well as a $1.3 million impairment on an equity investment. Adjustments to earnings before income taxes for the three months ended June 30, 2023, consist of the adjustments to operating income discussed above.
(3)		Adjustments to the provision for income taxes for the three months ended June 30, 2024, and 2023, consist of $4.6 million and $4.6 million, respectively, of tax expense related to the excluded items discussed above.

	Six months ended June 30, 2024											Six months ended June 30, 2023
	Reported				Adjustments			Adjusted (non-GAAP)				Reported				Adjustments			Adjusted (non-GAAP)
Net revenues	$	1,859.5			$	—		$	1,859.5			$	1,835.5			$	—		$	1,835.5
Operating income		381.1				36.8	(1)		417.9				355.6				39.4	(1)		395.0
Operating margin		20.5	%						22.5	%			19.4	%						21.5	%
Earnings before income taxes		341.9				38.1	(2)		380.0				310.2				39.4	(2)		349.6
Provision for income taxes		62.7				8.7	(3)		71.4				44.6				10.0	(3)		54.6
Effective income tax rate		18.3	%						18.8	%			14.4	%						15.6	%
Net earnings		279.2				29.4			308.6				265.6				29.4			295.0
Noncontrolling interests		—				—			—				0.1				0.1			0.2
Net earnings attributable to Allegion plc	$	279.2			$	29.4		$	308.6			$	265.5			$	29.3		$	294.8
Diluted earnings per ordinary share attributable to
Allegion plc shareholders:	$	3.18			$	0.33		$	3.51			$	3.01			$	0.33		$	3.34

(1)		Adjustments to operating income for the six months ended June 30, 2024, consist of $8.0 million of restructuring charges and acquisition and integration expenses and $28.8 million of amortization expense related to acquired intangible assets. Adjustments to operating income for the six months ended June 30, 2023, consist of $11.6 million of restructuring charges and acquisition and integration expenses, $27.8 million of amortization expense related to acquired intangible assets.
(2)		Adjustments to earnings before income taxes for the six months ended June 30, 2024, consist of the adjustments to operating income discussed above, as well as a $1.3 million impairment on an equity investment. Adjustments to earnings before income taxes for the six months ended June 30, 2023, consist of the adjustments to operating income discussed above.
(3)		Adjustments to the provision for income taxes for the six months ended June 30, 2024, and 2023, consist of $8.7 million and $10.0 million, respectively, of tax expense related to the excluded items discussed above.

ALLEGION PLC

SCHEDULE 3

RECONCILIATION OF GAAP TO NON-GAAP REVENUE AND OPERATING INCOME BY REGION (In millions)
	Three months ended June 30, 2024							Three months ended June 30, 2023
	As Reported				Margin			As Reported				Margin
Allegion Americas
Net revenues (GAAP)	$	770.7						$	727.2
Operating income (GAAP)	$	214.3			27.8	%		$	195.4			26.9	%
Acquisition and integration costs		2.7			0.4	%			2.1			0.3	%
Amortization of acquired intangible assets		9.2			1.2	%			8.4			1.1	%
Adjusted operating income		226.2			29.4	%			205.9			28.3	%
Depreciation and amortization of nonacquired intangible assets		10.3			1.3	%			8.2			1.1	%
Adjusted EBITDA	$	236.5			30.7	%		$	214.1			29.4	%
Allegion International
Net revenues (GAAP)	$	194.9						$	185.3
Operating income (GAAP)	$	17.7			9.1	%		$	13.9			7.5	%
Restructuring charges		0.2			0.1	%			1.5			0.8	%
Acquisition and integration costs		—			—	%			0.2			0.1	%
Amortization of acquired intangible assets		5.7			2.9	%			5.3			2.9	%
Adjusted operating income		23.6			12.1	%			20.9			11.3	%
Depreciation and amortization of nonacquired intangible assets		4.6			2.4	%			4.4			2.4	%
Adjusted EBITDA	$	28.2			14.5	%		$	25.3			13.7	%
Corporate
Operating loss (GAAP)	$	(23.0	)					$	(24.7	)
Acquisition and integration costs		1.8							0.5
Adjusted operating loss		(21.2	)						(24.2	)
Depreciation and amortization of nonacquired intangible assets		0.2							0.2
Adjusted EBITDA	$	(21.0	)					$	(24.0	)
Total
Net revenues	$	965.6						$	912.5
Adjusted operating income	$	228.6			23.7	%		$	202.6			22.2	%
Depreciation and amortization of nonacquired intangible assets		15.1			1.6	%			12.8			1.4	%
Adjusted EBITDA	$	243.7			25.3	%		$	215.4			23.6	%

	Six months ended June 30, 2024							Six months ended June 30, 2023
	As Reported				Margin			As Reported				Margin
Allegion Americas
Net revenues (GAAP)	$	1,480.0						$	1,468.1
Operating income (GAAP)	$	401.3			27.1	%		$	382.0			26.0	%
Restructuring charges		0.1			—	%			—			—	%
Acquisition and integration costs		4.6			0.3	%			5.2			0.4	%
Amortization of acquired intangible assets		17.5			1.2	%			16.8			1.1	%
Adjusted operating income		423.5			28.6	%			404.0			27.5	%
Depreciation and amortization of nonacquired intangible assets		19.5			1.3	%			16.4			1.1	%
Adjusted EBITDA	$	443.0			29.9	%		$	420.4			28.6	%
Allegion International
Net revenues (GAAP)	$	379.5						$	367.4
Operating income (GAAP)	$	30.7			8.1	%		$	24.5			6.7	%
Restructuring charges		0.5			0.1	%			4.7			1.3	%
Acquisition and integration costs		0.4			0.1	%			0.4			0.1	%
Amortization of acquired intangible assets		11.3			3.0	%			11.0			3.0	%
Adjusted operating income		42.9			11.3	%			40.6			11.1	%
Depreciation and amortization of nonacquired intangible assets		9.1			2.4	%			9.1			2.4	%
Adjusted EBITDA	$	52.0			13.7	%		$	49.7			13.5	%
Corporate
Operating loss (GAAP)	$	(50.9	)					$	(50.9	)
Restructuring charges		0.1							—
Acquisition and integration costs		2.3							1.3
Adjusted operating loss		(48.5	)						(49.6	)
Depreciation and amortization of nonacquired intangible assets		0.5							0.9
Adjusted EBITDA	$	(48.0	)					$	(48.7	)
Total
Net revenues	$	1,859.5						$	1,835.5
Adjusted operating income	$	417.9			22.5	%		$	395.0			21.5	%
Depreciation and amortization of nonacquired intangible assets		29.1			1.5	%			26.4			1.5	%
Adjusted EBITDA	$	447.0			24.0	%		$	421.4			23.0	%

ALLEGION PLC

SCHEDULE 4

RECONCILIATION OF CASH PROVIDED BY OPERATING ACTIVITIES TO AVAILABLE CASH FLOW AND NET EARNINGS TO ADJUSTED EBITDA (In millions)
	Six months ended June 30,
		2024				2023
Net cash provided by operating activities	$	224.1			$	230.1
Capital expenditures		(48.1	)			(40.0	)
Available cash flow	$	176.0			$	190.1

	Three months ended June 30,								Six months ended June 30,
		2024				2023				2024				2023
Net earnings (GAAP)	$	155.4			$	142.0			$	279.2			$	265.6
Provision for income taxes		33.6				20.5				62.7				44.6
Interest expense		25.1				23.7				48.0				47.3
Amortization of acquired intangible assets		14.9				13.7				28.8				27.8
Depreciation and amortization of nonacquired intangible assets		15.1				12.8				29.1				26.4
EBITDA		244.1				212.7				447.8				411.7
Other income, net		(5.1	)			(1.6	)			(8.8	)			(1.9	)
Acquisition and integration costs and restructuring charges		4.7				4.3				8.0				11.6
Adjusted EBITDA	$	243.7			$	215.4			$	447.0			$	421.4

ALLEGION PLC

SCHEDULE 5

RECONCILIATION OF GAAP REVENUE GROWTH TO NON-GAAP ORGANIC REVENUE GROWTH BY REGION
	Three months ended June 30,						Six months ended June 30,
	2024			2023			2024			2023
Allegion Americas
Revenue growth (GAAP)	6.0	%		23.8	%		0.8	%		32.4	%
Acquisitions	(0.4	)%		(16.4	)%		(0.2	)%		(18.0	)%
Currency translation effects	0.1	%		0.3	%		0.1	%		0.3	%
Organic growth (non-GAAP)	5.7	%		7.7	%		0.7	%		14.7	%
Allegion International
Revenue growth (GAAP)	5.2	%		(0.3	)%		3.3	%		(5.2	)%
Acquisitions	(3.2	)%		(0.1	)%		(2.3	)%		0.2	%
Currency translation effects	1.1	%		(0.6	)%		0.2	%		2.0	%
Organic growth (non-GAAP)	3.1	%		(1.0	)%		1.2	%		(3.0	)%
Total
Revenue growth (GAAP)	5.8	%		18.0	%		1.3	%		22.6	%
Acquisitions	(0.9	)%		(12.5	)%		(0.6	)%		(13.2	)%
Currency translation effects	0.3	%		0.1	%		0.1	%		0.8	%
Organic growth (non-GAAP)	5.2	%		5.6	%		0.8	%		10.2	%

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240724900354/en/

Media Contact:

Whitney Moorman – Director, Global Communications

317-810-3241

Whitney.Moorman@allegion.com

Analyst Contacts:

Jobi Coyle – Director, Investor Relations

317-810-3107

Jobi.Coyle@allegion.com

Josh Pokrzywinski – Vice President, Investor Relations

463-210-8595

Joshua.Pokrzywinski@allegion.com

Source: Allegion plc

FAQ

What were Allegion's Q2-2024 revenue and EPS results?

Allegion reported Q2-2024 revenues of $965.6 million, up 5.8% year-over-year. Net EPS was $1.77, up 9.9%, and adjusted EPS was $1.96, up 11.4% compared to Q2-2023.

How did Allegion's operating margin perform in Q2-2024?

Allegion's Q2-2024 operating margin was 21.6%, compared to 20.2% in Q2-2023. The adjusted operating margin improved to 23.7%, up 150 basis points from 22.2% in the same quarter last year.

What is Allegion's updated full-year 2024 outlook for ALLE stock?

Allegion raised its full-year 2024 outlook, expecting reported revenue growth of 2.5% to 3.5% and adjusted EPS in the range of $7.15 to $7.30. The company affirmed its expected full-year available cash flow of approximately $540 to $570 million.

How did Allegion's Americas and International segments perform in Q2-2024?

The Americas segment revenues were up 6.0% (5.7% organic growth), with non-residential business up mid-single digits. The International segment revenues increased 5.2% (3.1% organic growth), driven by price realization and volume growth.