| Metric (USD Millions) | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 |
|-----------------------|---------|---------|---------|---------|---------|---------|---------|
| Allegion Americas     | $740.9  **[0001579241-23-000023_alle-20230331.htm:20]**  | $727.2  **[0001579241-23-000039_alle-20230630.htm:23]**  | $740.9  **[0001579241-23-000050_alle-20230930.htm:24]**  | N/A     | $709.3  **[0001579241-24-000031_alle-20240331.htm:19]**  | $770.7  **[0001579241-24-000045_alle-20240630.htm:20]**  | $782.4  **[0001579241-24-000049_alle-20240930.htm:22]**  |
| Allegion International| $182.1  **[0001579241-23-000023_alle-20230331.htm:20]**  | $185.3  **[0001579241-23-000039_alle-20230630.htm:23]**  | $177.0  **[0001579241-23-000050_alle-20230930.htm:24]**  | N/A     | $184.6  **[0001579241-24-000031_alle-20240331.htm:19]**  | $194.9  **[0001579241-24-000045_alle-20240630.htm:20]**  | $184.7  **[0001579241-24-000049_alle-20240930.htm:22]**  |
| Total Net Revenues    | $923.0  **[0001579241-23-000023_alle-20230331.htm:20]**  | $912.5  **[0001579241-23-000039_alle-20230630.htm:23]**  | $917.9  **[0001579241-23-000050_alle-20230930.htm:24]**  | N/A     | $893.9  **[0001579241-24-000031_alle-20240331.htm:19]**  | $965.6  **[0001579241-24-000045_alle-20240630.htm:20]**  | $967.1  **[0001579241-24-000049_alle-20240930.htm:22]**  |

b59c02afb6df0799d7b01236e6ed164ead3e3e40fddfa252cf5a8e7b26ab1525

Adjustments for Non-Cash Items [USD, M]

Stock-Based Compensation [USD, M]

Changes in Working Capital [USD, M]

Capital Expenditures (CapEx) [USD, M]

Proceeds from / Repayments of Debt [USD, M]

Share Repurchases [USD, M]

Dividend Payments [USD, M]

Net Change in Cash [USD, M]

ddef9d2860dd200d57ba0a0d06f12900da62ab379ef3721e17e959c81af8eba3

Allegion plc is a leading global provider of security products and solutions, operating in two segments: Allegion Americas and Allegion International. The company offers a wide range of security products and solutions for commercial, institutional, and residential facilities worldwide, including education, healthcare, government, hospitality, retail, commercial office, and residential markets **[0001579241-24-000006_alle-20231231.htm:5]** **[0001579241-24-000049_alle-20240930.htm:19]** **[0001579241-24-000006_alle-20231231.htm:47]**. Their product lines include mechanical products such as locks, locksets, portable locks, key systems, door controls, and exit devices, as well as electronic security products and access control systems, which encompass electrified locks, access control systems, and electronic door controls **[0001579241-24-000006_alle-20231231.htm:10]** **[0001579241-24-000006_alle-20231231.htm:52]**. Allegion's business strategy includes leveraging its strong brand portfolio, which includes well-known names like Schlage, Von Duprin, and LCN, to maintain a leading position in the security products industry **[0001579241-24-000006_alle-20231231.htm:6]** **[0001579241-24-000006_alle-20231231.htm:52]**.

1. **Mechanical Products** - Offers a variety of security solutions including locks, locksets, portable locks, key systems, door controls, and exit devices for various markets.
2. **Electronic Security Products and Access Control Systems** - Provides electrified locks, access control systems, and electronic door controls, catering to both residential and non-residential categories.
3. **Services and Software** - Includes inspection, maintenance, repair, and SaaS offerings to support and enhance security product functionality.

6204f5294a1af2a7b5281bd850cfa3ccf16e8115537e99589583939317fd196e

| Metric (USD Million) | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 |
|----------------------|---------|---------|---------|---------|---------|---------|---------|
| Allegion Americas    | **740.9**  **[0001579241-23-000023_alle-20230331.htm:20]**  | **727.2**  **[0001579241-23-000039_alle-20230630.htm:23]**  | **740.9**  **[0001579241-23-000050_alle-20230930.htm:24]**  | N/A     | N/A     | **770.7**  **[0001579241-24-000045_alle-20240630.htm:20]**  | **782.4**  **[0001579241-24-000049_alle-20240930.htm:17]**  |
| Allegion International| **182.1**  **[0001579241-23-000023_alle-20230331.htm:20]**  | **185.3**  **[0001579241-23-000039_alle-20230630.htm:23]**  | **177.0**  **[0001579241-23-000050_alle-20230930.htm:24]**  | N/A     | N/A     | **194.9**  **[0001579241-24-000045_alle-20240630.htm:20]**  | **184.7**  **[0001579241-24-000049_alle-20240930.htm:17]**  |
| Total Net Revenues   | **923.0**  **[0001579241-23-000023_alle-20230331.htm:20]**  | **912.5**  **[0001579241-23-000039_alle-20230630.htm:23]**  | **917.9**  **[0001579241-23-000050_alle-20230930.htm:24]**  | N/A     | **893.9**  **[0001579241-24-000031_alle-20240331.htm:15]**  | **965.6**  **[0001579241-24-000045_alle-20240630.htm:20]**  | **967.1**  **[0001579241-24-000049_alle-20240930.htm:17]**  |

49e28291a8f353014c569e4762c981b58de968f631001965ffcbcea54b9da5d9

1. Given the expected softness in the multifamily segment and potential weaknesses in the healthcare vertical within institutional markets, how confident are you in your non-residential growth projections for the next 12 months, and what specific strategies are you employing to mitigate these challenges?

2. With customers potentially experiencing fatigue from continuous price increases in an inflationary environment, how sustainable is your pricing strategy to cover inflationary pressures without adversely affecting demand or market share?

3. Historically, international specification has not been a strength for Allegion; can you elaborate on the progress you've made in building out this capability and how the acquisition of Boss Door Controls is enhancing your competitive position in international markets?

4. Considering that ESSER funding did not significantly benefit your education vertical and municipal bond issuance might not remain as strong, how do you plan to sustain growth in the education sector amid these funding challenges?

5. In light of past supply chain issues affecting your electronics business and the unusual comparables in 2023, what concrete measures are you taking to stabilize this segment, and how realistic is your expectation of achieving high single to low double-digit growth in electronics moving forward?

619619151babca178d2ae8fcf148a49168850a808d2e588662b40dcfbe0ffdff

4a1629265c55a8d25a8383208af6b7d914de9f924674b9063fc298a90d2d837f

769b9b81e24345ccbb19559f8c576447523d6ccfba81e934d96e9327f8487a01

U.S. Revenue

Non-U.S. Revenue

Allegion Americas

Allegion International

- EMEA

- Asia Pacific

Total Revenue

61e6056b0ce5d9785ec201f5c41159cde4faac8bc98749840bfea268198686c2

99b3e2a0247bceefaed01953828bbb2792d9c83bd550f89cc348d734e0390b3e

### Q3 2024 Earnings Call
- **Issued Period**: Q3 2024
- **Guided Period**: FY 2024
- **Guidance**:
  1. **Total Reported Revenue Growth**: **2.5% to 3.5%**  **[ALLE_3403606_4]** .
  2. **Total Organic Revenue Growth**: **1.5% to 2.5%**  **[ALLE_3403606_4]** .
  3. **Adjusted Earnings Per Share (EPS)**: **$7.35 to $7.45**  **[ALLE_3403606_4]** .
  4. **Available Cash Flow**: **$540 million to $570 million**  **[ALLE_3403606_4]** .

### Q2 2024 Earnings Call
- **Issued Period**: Q2 2024
- **Guided Period**: FY 2024
- **Guidance**:
  1. **Revenue Growth**:
     - **Americas Segment**: Total growth **2.5% to 3.5%**, organic growth **2% to 3%**  **[ALLE_3394103_5]** .
     - **International Segment**: Total growth **3% to 4%**, organic growth **0.5% to 1.5%**  **[ALLE_3394103_5]** .
     - **Overall Company**: Total growth **2.5% to 3.5%**, organic growth **1.5% to 2.5%**  **[ALLE_3394103_5]** .
  2. **Adjusted EPS**: **$7.15 to $7.30**  **[ALLE_3394103_5]** .
  3. **Available Cash Flow**: **$540 million to $570 million**  **[ALLE_3394103_5]** .

### Q1 2024 Earnings Call
- **Issued Period**: Q1 2024
- **Guided Period**: FY 2024
- **Guidance**:
  1. **Total and Organic Revenue Growth in the Americas**: **1.5% to 3.5%**  **[ALLE_3374016_5]** .
  2. **Total Revenue Growth for Allegion International**: **1.5% to 3.5%**, organic growth **-1% to 1%**  **[ALLE_3374016_5]** .
  3. **Overall Company Revenue Growth**: Total growth **1.5% to 3.5%**, organic growth **1% to 3%**  **[ALLE_3374016_5]** .
  4. **Adjusted EPS**: **$7.00 to $7.15**  **[ALLE_3374016_5]** .
  5. **Available Cash Flow**: **$540 million to $570 million**  **[ALLE_3374016_5]** .

### Q4 2023 Earnings Call
- **Issued Period**: Q4 2023
- **Guided Period**: FY 2024
- **Guidance**:
  1. **Total and Organic Revenue Growth**:
     - **Americas**: Total and organic growth **1.5% to 3.5%**  **[ALLE_3374016_5]** .
     - **Allegion International**: Total growth **1.5% to 3.5%**, organic growth **-1% to 1%**  **[ALLE_3374016_5]** .
     - **Overall Company**: Total growth **1.5% to 3.5%**, organic growth **1% to 3%**  **[ALLE_3374016_5]** .
  2. **Adjusted EPS**: **$7 to $7.15**  **[ALLE_3374016_5]** .
  3. **Available Cash Flow**: **$540 million to $570 million**  **[ALLE_3374016_5]** .
  4. **Margin Expansion**: Expected consistent with historical framework  **[ALLE_3374016_5]** .
  5. **Tax Rate**: **18% to 19%**  **[ALLE_3374016_3]** .

d4a5dab7a23135fb5bf9d93576dd8b4fdeb1270806780938849b3583bb0d5ba6

Total Revenue [USD, Millions]

Cost of Goods Sold (COGS) [USD, Millions]

SG&A [USD, Millions]

R&D [USD, Millions]

D&A [USD, Millions]

Interest Expense [USD, Millions]

Operating Income (EBIT) [USD, Millions]

Net Income [USD, Millions]

EPS - Basic [USD, Per Share]

EPS - Diluted [USD, Per Share]

678aabb541b3a6739034b7be5a87de200ef8bbfcf073f01707002a9d8269c9a5

- **Assa Abloy AB** - Mentioned as a principal global competitor in the security products markets  **[0001579241-24-000006_alle-20231231.htm:9]** .
- **dormakaba Group** - Mentioned as a principal global competitor in the security products markets  **[0001579241-24-000006_alle-20231231.htm:9]** .
- **Fortune Brands Innovations, Inc.** - Mentioned as a competitor in the North American residential market  **[0001579241-24-000006_alle-20231231.htm:9]** .

aa2292b0e2907e3a2511c394bdb72a1746e2b9efdb08a86dc1d7625b97a07101

| Name                | Position                                             | Start Date       | Short Bio                                                                                                                                                                                                 |
|---------------------|------------------------------------------------------|------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| John H. Stone       | President and Chief Executive Officer                | July 2022        | John H. Stone has served as the President and Chief Executive Officer of Allegion plc since July 2022. Before joining Allegion, he was the President of Worldwide Construction, Forestry and Power Systems at Deere & Company from 2020 to 2022  **[0001193125-23-163615_d479806ds8.htm:8]** **[0001579241-23-000006_alle-20221231.htm:44]** . |
| Michael J. Wagnes   | Senior Vice President and Chief Financial Officer    | March 2022       | Michael J. Wagnes has served as the Senior Vice President and Chief Financial Officer of Allegion plc since March 2022. Prior to this role, he was the Vice President and General Manager, Commercial Americas from 2020 to 2022  **[0001579241-24-000020_alle-20240419.htm:36]** **[0001579241-23-000006_alle-20221231.htm:44]** .              |
| Jeffrey N. Braun    | Senior Vice President and General Counsel            | 2014             | Jeffrey N. Braun has served as the Senior Vice President and General Counsel at Allegion plc since 2014. He also held the position of Secretary from July 2022 to February 2023 and from 2018 to 2020  **[0001579241-24-000020_alle-20240419.htm:36]** **[0001579241-23-000006_alle-20221231.htm:44]** .                                      |
| Timothy P. Eckersley| President, International and Senior Vice President   | June 2023        | Timothy P. Eckersley has served as the President, International and Senior Vice President, Allegion since June 2023. Prior to this role, he served as the Senior Vice President – Allegion International from 2021 to June 2023  **[0001579241-24-000020_alle-20240419.htm:36]** .                  |
| Jennifer L. Hawes   | Senior Vice President – Chief Human Resources Officer| February 2023    | Jennifer L. Hawes has served as the Senior Vice President – Chief Human Resources Officer at Allegion since February 2023. Prior to this role, she was the Vice President – Chief Human Resources Officer from 2022 to February 2023  **[0001579241-24-000020_alle-20240419.htm:36]** .            |
| David S. Ilardi     | Senior Vice President – Allegion Americas            | March 2022       | David S. Ilardi has served as the Senior Vice President – Allegion Americas since March 2022. Prior to this role, he was the General Manager of Allegion Home from 2019 to 2022  **[0001579241-24-000020_alle-20240419.htm:36]** **[0001579241-23-000006_alle-20221231.htm:44]** .                                                          |
| Tracy L. Kemp       | Senior Vice President – Chief Information and Digital Officer | December 2020 | Tracy L. Kemp has served as the Senior Vice President – Chief Information and Digital Officer at Allegion since December 2020. Prior to this role, she was the Senior Vice President – Chief Customer and Digital Officer from 2019 to 2020  **[0001579241-24-000020_alle-20240419.htm:36]** .    |
| Robert C. Martens   | Senior Vice President – Chief Innovation and Design Officer | December 2019 | Robert C. Martens has served as the Senior Vice President – Chief Innovation and Design Officer at Allegion since December 2019. He also holds the position of Futurist and President of Allegion Ventures, a role he has been in since 2017  **[0001579241-24-000020_alle-20240419.htm:36]** **[0001579241-23-000006_alle-20221231.htm:44]** . |
| Nickolas A. Musial  | Vice President, Controller and Chief Accounting Officer | March 2022     | Nickolas A. Musial has served as the Vice President, Controller, and Chief Accounting Officer at Allegion plc since March 2022. Prior to this role, he was the Vice President of Finance for Allegion Americas from 2017 to 2022  **[0001579241-24-000020_alle-20240419.htm:36]** .                |
| Vincent M. Wenos    | Senior Vice President – Chief Technology Officer     | June 2019        | Vincent M. Wenos has served as the Senior Vice President – Chief Technology Officer at Allegion since June 2019. Prior to this role, he was the Vice President – Global Technology and Engineering from 2018 to 2019  **[0001579241-24-000020_alle-20240419.htm:36]** .                            |

8afcd1c332820a47547e7edde69f094fae1d6625bb816b66dd4fa2e24885aafb

| Program Details          | Program 1       |
|--------------------------|-----------------|
| Approval Date            | **June 2023**  **[0001579241-24-000049_alle-20240930.htm:12]** **[0001579241-24-000049_alle-20240930.htm:37]**  |
| End Date/Duration        | No expiration date  **[0001579241-24-000049_alle-20240930.htm:37]**  |
| Total additional amount  | **$500.0 million**  **[0001579241-24-000049_alle-20240930.htm:12]** **[0001579241-24-000049_alle-20240930.htm:37]**  |
| Remaining authorization amount | **$340.0 million** (as of 2024-09-30)  **[0001579241-24-000049_alle-20240930.htm:12]** **[0001579241-24-000049_alle-20240930.htm:37]**  |
| Details                  | The program aims to return capital to shareholders, improve EPS, and manage capital structure flexibly.  **[0001579241-24-000049_alle-20240930.htm:12]** **[0001579241-24-000049_alle-20240930.htm:37]** **[0001579241-24-000045_alle-20240630.htm:35]** **[0001579241-24-000031_alle-20240331.htm:33]**  |

fe6ce0f8f759ccb0f7223524d1e4d623d96e4c37b38e7c3eaa9c1057d2cd2658

**Annual guidance for FY 2024:**
- **Total reported revenue growth**: 2.5% to 3.5%  **[ALLE_3403606_4]**  (no change from 2.5% to 3.5%  **[ALLE_3394103_5]** )  
- **Total organic revenue growth**: 1.5% to 2.5%  **[ALLE_3403606_4]**  (no change from 1.5% to 2.5%  **[ALLE_3394103_5]** )  
- **Adjusted EPS**: $7.35 to $7.45  **[ALLE_3403606_4]**  (raised from $7.15 to $7.30  **[ALLE_3394103_5]** )  
- **Available Cash Flow**: $540 million to $570 million  **[ALLE_3403606_4]**  (no change from $540 million to $570 million  **[ALLE_3394103_5]** )  

a6e846f8bebf9533ec7ece02b35b58d27471ef1e99493c6e5255a8899daba9c0

| Name                          | Start Date | End Date | Reason for Change |
|-------------------------------|------------|----------|-------------------|
| PricewaterhouseCoopers LLP    | 2013  **[0001579241-24-000006_alle-20231231.htm:88]**  | Present  | Current auditor   |

02e29bf43256d29ca4bca30eac469a1530aa12db478b72540f905280521fa96e

9975227640ba5c7869a33841841a8163027cceaad7ebee52df7ab1abf6621fe1

23794d91c53ae875c8e247d72561e35d9d06ee07c70c9e0dbcc977a6d161504a

- Total Revenue (Q3 2024): $967.1 million  **[0001579241-24-000049_alle-20240930.htm:17]** **[0001579241-24-000049_alle-20240930.htm:15]** , up 5% YoY from $917.9 million  **[0001579241-23-000050_alle-20230930.htm:16]**   
- Allegion Americas (Q3 2024): $782.4 million  **[0001579241-24-000049_alle-20240930.htm:17]** **[0001579241-24-000049_alle-20240930.htm:15]** , up 6% YoY from $740.9 million  **[0001579241-23-000050_alle-20230930.htm:16]**   
- Allegion International (Q3 2024): $184.7 million  **[0001579241-24-000049_alle-20240930.htm:17]** **[0001579241-24-000049_alle-20240930.htm:15]** , up 4% YoY from $177.0 million  **[0001579241-23-000050_alle-20230930.htm:16]**   
- Americas Services (Q3 2024): $9.1 million  **[0001579241-24-000049_alle-20240930.htm:17]** **[0001579241-24-000049_alle-20240930.htm:15]** , down 8% YoY from $9.9 million  **[0001579241-23-000050_alle-20230930.htm:16]**   
- Cash & Equivalents (Q3 2024): $878.9 million  **[0001579241-24-000049_alle-20240930.htm:2]** , up **141%** YoY from $364.3 million  **[0001579241-23-000050_alle-20230930.htm:2]**   
- Short-Term Debt (Q3 2024): $418.9 million  **[0001579241-24-000049_alle-20240930.htm:2]** , up **3,225%** YoY from $12.6 million  **[0001579241-23-000050_alle-20230930.htm:2]**   

63bd45546bae464edd30005762ac1436be826e717f247323dfa85d92a3a1f312

5bd8ccab496327267a7b93e6e495dd26b83a69342c4b51fd9352d864d9eb872c

dcb295f62859742e4afe997d6da9e221753f7e016bd6a0da4beb6f3d75e2863d

- **Reliance on price increases for growth amid flat or declining volumes**, especially in the residential segment, suggests potential limitations in driving future revenue growth.  **[ALLE_3374016_19]** **[ALLE_3374016_5]**
- **Margins may face pressure without volume growth**, as further margin expansion could be challenging without significant improvements in market conditions, particularly in non-residential sectors where the company expects low to mid-single-digit growth and acknowledges volatile vertical mixes.  **[ALLE_3374016_22]** **[ALLE_3374016_21]**
- **Normalization of backlog levels reduces potential upside**, as the backlog has returned to normal lead times, indicating that any pent-up demand has been fulfilled, and with residential markets remaining soft, the company does not foresee significant upside from this segment.  **[ALLE_3374016_17]** **[ALLE_3374016_5]**

5501bc6aa082d04cf9d52845b0b4e7aa70552fbd9cde723722a408db15b70033

- **Exposure to Tariffs Could Hurt Supply Chain Resiliency**: The CEO acknowledged that "tariffs of any kind are not helpful to a company like Allegion in terms of our supply chain"  **[ALLE_3380734_9]** , indicating potential vulnerability to future tariff policies given the company's manufacturing footprint outside the U.S.
- **Softening Demand in Electronics Segment**: The Americas electronics business experienced a **low single-digit decline** in the quarter.  **[ALLE_3380734_7]**  While the company views this segment as a long-term growth driver, the recent decline may signal slowing demand in this key area.
- **Project Delays and Softening Leading Indicators**: The company admitted hearing about **project delays** in the commercial sector, with some "multifamily projects on hold for a little bit".  **[ALLE_3380734_6]**  Additionally, construction labor shortages are causing projects to take longer, potentially impacting future revenues.  **[ALLE_3380734_8]**

1bf3d50cbf49448483d6cdfe584aac3eed5a764eae68a30f4c11871e41004375

- **Allegion's International segment returned to volume growth after several challenging periods**, with strong demand for electronics and software solutions growing at high single-digit rates, and contributions from recent acquisitions boosting performance.  **[ALLE_3394103_10]**
- **Broad-based adoption of electronic locks across multiple sectors, including education, healthcare, commercial office, and multifamily**, driven by the increasing use of smartphone wallets and mobile credentials, is fueling sustained demand and positioning Allegion as a leader in this space.  **[ALLE_3394103_14]**
- **Strong margin expansion in the Americas**, with adjusted operating margins up significantly, driven by effective pricing strategies to cover inflation and productivity initiatives to fund investments, and the company expects to maintain and expand these margins based on their proven approach.  **[ALLE_3394103_6]**

f8628cc1d118f3a47805df3cc524a2b613a66bb5aa9a29d5e82819b54094be25

1. **Americas Margins and Sustainability**  
   **Q:** Can you discuss the sustainability of Americas' strong margins?  
   **A:** Management noted that the Americas achieved their best margins in some time, driven by pricing to cover inflation and productivity efforts. They expect to maintain these margins by continuing to drive price and productivity, indicating confidence in sustaining the current margin profile.  **[ALLE_3394103_8]** 

2. **Revised EPS Guidance and Margins**  
   **Q:** Why was operational EPS guidance raised despite flat organic growth?  
   **A:** The company raised operational EPS guidance by **$0.05**, attributing it to strong margin performance in the first half, driven by effective price and productivity actions. Margins have performed well, allowing for the upward revision in earnings expectations.  **[ALLE_3394103_12]** 

3. **M&A Activity and Outlook**  
   **Q:** Does recent M&A activity signal a change in acquisition pace?  
   **A:** Management is pleased with the four acquisitions closed year-to-date, each being accretive to EPS. They intend to remain strategic and acquisitive, noting that the environment for strategic acquisitions is better than a year or two ago, with a good pipeline of opportunities. Investors can expect a continued cadence of tuck-in acquisitions.  **[ALLE_3394103_7]** 

4. **Residential Market Outlook**  
   **Q:** What is the outlook for the residential market?  
   **A:** While secondary home sales are at low levels, housing completions have maintained a decent pace. Management feels good about execution in their residential business but maintains a cautious, flat outlook due to high interest rates affecting some activities. Any relief in interest rates would be positive for this segment.  **[ALLE_3394103_13]** 

5. **Institutional Demand in Americas**  
   **Q:** How is institutional demand trending in the Americas?  
   **A:** The institutional segment is viewed as stable with less volatility than commercial sectors. Despite mixed indicators, municipal bond issuance is up about **30% year-to-date**, supporting funding for schools and other institutions, which contributes to stable demand.  **[ALLE_3394103_11]** 

6. **Commodity Costs Outlook**  
   **Q:** What are your expectations for commodity costs?  
   **A:** After extreme volatility in 2021 and 2022, commodity costs have stabilized with minor fluctuations. Management does not anticipate any dramatic changes in raw material costs on the horizon.  **[ALLE_3394103_9]** 

7. **International Business Performance**  
   **Q:** Has the International segment returned to volume growth?  
   **A:** The International segment showed volume growth for the first time in years, with contributions from acquisitions and strong demand in electronics and software solutions. Portable security also turned positive on volume in Q2. Management credits self-help efforts and strong performance in key areas.  **[ALLE_3394103_10]** 

8. **Electronic Locks Growth Drivers**  
   **Q:** What is driving growth in electronic locks?  
   **A:** Demand for electronic locks is strong and broad-based across sectors like education and healthcare. Growth is fueled by integration with smartphone wallets and mobile credentials, as users prefer digital over physical keys. This trend aligns with the company's focus on seamless access and safety.  **[ALLE_3394103_14]** 

9. **New Construction vs. Aftermarket Sales**  
   **Q:** How are new construction and aftermarket sales performing?  
   **A:** The company maintains a roughly **50-50%** mix between new construction and aftermarket sales. This varies by region, with new construction higher in growth areas like Texas and Florida. Once specified into institutions, aftermarket business remains strong due to replacements and upgrades.  **[ALLE_3394103_15]** 

31ebbd1259383c9d218fbf09d17dfb8d8d61a9a3b6493107721e0aa7df39fe4d

- **Allegion is increasing its adjusted earnings per share outlook to a range of $7.35 to $7.45**, reflecting strong operational performance in the third quarter.  **[ALLE_3403606_4]**
- The company is **accelerating capital deployment**, including the acquisition of **SOSS Door Hardware**, which is expected to deliver solid returns and be **accretive to EPS in 2025**.  **[ALLE_3403606_14]** **[ALLE_3403606_4]**
- Allegion anticipates **organic growth in 2025**, particularly in **stable institutional markets showing signs of modest growth**, and has a **healthy balance sheet and strong cash generation** to support future capital deployment and shareholder returns.  **[ALLE_3403606_4]**

3a3d6c8cf811eb7527c3bb93c3d320230f16c6c691174dc058956b61aceaed8b

- **Allegion's electronics business is a long-term growth driver, expected to deliver high single-digit to low double-digit CAGR**, indicating strong future prospects.  **[ALLE_3380734_7]**
- **The company is heavily weighted towards the stable institutional segment, which remains healthy and less affected by project delays**, providing resilience and stability to their revenue.  **[ALLE_3380734_6]** **[ALLE_3380734_8]**
- **Allegion has improved its supply chain resiliency and flexibility**, enabling it to navigate potential tariff changes or supply chain disruptions effectively.  **[ALLE_3380734_9]**

2fd0a5e2b9c94de6cce3d36bff6c1dffa66ab0f97b931d00d002439dd03932ac

| Year | Amount Due (in millions) | Debt Type           | Interest Rate (%) | % of Total Debt                                                                 |
|----------|------------------------------|-------------------------|-----------------------|------------------------------------------------------------------------------------|
| 2024     | $418.9  **[0001579241-24-000049_alle-20240930.htm:27]** **[0001579241-24-000049_alle-20240930.htm:6]**             | 3.200% Senior Notes     | 3.200  **[0001579241-24-000049_alle-20240930.htm:28]** **[0001579241-24-000049_alle-20240930.htm:7]**       | 17.4% = (418.9 / 2,402.1) * 100  **[0001579241-24-000049_alle-20240930.htm:27]** **[0001579241-24-000049_alle-20240930.htm:6]**   **[0001579241-24-000049_alle-20240930.htm:28]** **[0001579241-24-000049_alle-20240930.htm:7]**                               |
| 2025     | $21.9  **[0001579241-24-000049_alle-20240930.htm:27]** **[0001579241-24-000049_alle-20240930.htm:6]**              | Term Facility           | 6.070  **[0001579241-24-000049_alle-20240930.htm:27]** **[0001579241-24-000049_alle-20240930.htm:6]**       | 0.9% = (21.9 / 2,402.1) * 100  **[0001579241-24-000049_alle-20240930.htm:27]** **[0001579241-24-000049_alle-20240930.htm:6]**                                           |
| 2026     | $190.6  **[0001579241-24-000049_alle-20240930.htm:27]** **[0001579241-24-000049_alle-20240930.htm:6]**             | Term Facility           | 6.070  **[0001579241-24-000049_alle-20240930.htm:27]** **[0001579241-24-000049_alle-20240930.htm:6]**       | 7.9% = (190.6 / 2,402.1) * 100  **[0001579241-24-000049_alle-20240930.htm:27]** **[0001579241-24-000049_alle-20240930.htm:6]**                                          |
| 2027     | $400.0  **[0001579241-24-000049_alle-20240930.htm:27]** **[0001579241-24-000049_alle-20240930.htm:6]**             | 3.550% Senior Notes     | 3.550  **[0001579241-24-000049_alle-20240930.htm:28]** **[0001579241-24-000049_alle-20240930.htm:7]**       | 16.7% = (400.0 / 2,402.1) * 100  **[0001579241-24-000049_alle-20240930.htm:27]** **[0001579241-24-000049_alle-20240930.htm:6]**   **[0001579241-24-000049_alle-20240930.htm:28]** **[0001579241-24-000049_alle-20240930.htm:7]**                               |
| 2029     | $400.0  **[0001579241-24-000049_alle-20240930.htm:27]** **[0001579241-24-000049_alle-20240930.htm:6]**             | 3.500% Senior Notes     | 3.500  **[0001579241-24-000049_alle-20240930.htm:28]** **[0001579241-24-000049_alle-20240930.htm:7]**       | 16.7% = (400.0 / 2,402.1) * 100  **[0001579241-24-000049_alle-20240930.htm:27]** **[0001579241-24-000049_alle-20240930.htm:6]**   **[0001579241-24-000049_alle-20240930.htm:28]** **[0001579241-24-000049_alle-20240930.htm:7]**                               |
| 2032     | $600.0  **[0001579241-24-000049_alle-20240930.htm:27]** **[0001579241-24-000049_alle-20240930.htm:6]**             | 5.411% Senior Notes     | 5.411  **[0001579241-24-000049_alle-20240930.htm:28]** **[0001579241-24-000049_alle-20240930.htm:7]**       | 25.0% = (600.0 / 2,402.1) * 100  **[0001579241-24-000049_alle-20240930.htm:27]** **[0001579241-24-000049_alle-20240930.htm:6]**   **[0001579241-24-000049_alle-20240930.htm:28]** **[0001579241-24-000049_alle-20240930.htm:7]**                               |
| 2034     | $400.0  **[0001579241-24-000049_alle-20240930.htm:27]** **[0001579241-24-000049_alle-20240930.htm:6]**             | 5.600% Senior Notes     | 5.600  **[0001579241-24-000049_alle-20240930.htm:28]** **[0001579241-24-000049_alle-20240930.htm:7]**       | 16.7% = (400.0 / 2,402.1) * 100  **[0001579241-24-000049_alle-20240930.htm:27]** **[0001579241-24-000049_alle-20240930.htm:6]**   **[0001579241-24-000049_alle-20240930.htm:28]** **[0001579241-24-000049_alle-20240930.htm:7]**                               |

1bf013d12999fd666646c963e8adaf63a5a97171d22ea853021dc5119af3568c

1. **Americas Market Outlook**  
   **Q:** Are you seeing project delays or worse market outlook?  
   **A:** Our business is heavily weighted towards institutional markets, which remain **stable**.  **[ALLE_3380734_6]**  While there are pockets of strength and weakness in commercial areas like office and multifamily, our broad portfolio provides a solid outlook for 2024.  **[ALLE_3380734_6]**  **Bond issuance had a strong Q1 year-over-year**, giving us confidence in our projections.  **[ALLE_3380734_6]**  We hear of some project delays but not many cancellations; institutional demand is stable.  **[ALLE_3380734_6]** 

2. **Leading Indicators vs. On-the-Ground Activity**  
   **Q:** What is your perspective on softening lead indicators?  
   **A:** We monitor lead indicators like ABI and Dodge Momentum but caution against overinterpreting them.  **[ALLE_3380734_8]**  Over the past **18–20 months**, institutional markets have been **favorable** compared to other commercial sectors, aligning with our experiences.  **[ALLE_3380734_8]**  Labor shortages are extending project timelines, which may affect these indicators.  **[ALLE_3380734_8]**  Our business remains heavily weighted towards **stable institutional markets**.  **[ALLE_3380734_8]** 

3. **Electronics Segment Growth**  
   **Q:** Do you expect growth in Americas electronics?  
   **A:** Electronics is a **long-term growth driver**, delivering **high single-digit to low double-digit CAGRs**.  **[ALLE_3380734_7]**  Despite robust growth over the last two years due to supply chain catch-up, we anticipate continued above-market growth.  **[ALLE_3380734_7]** 

4. **Supply Chain Resilience amid Tariffs**  
   **Q:** How nimble is your supply chain against potential tariffs?  
   **A:** Tariffs are **not helpful**, but we've improved our **supply chain resiliency** since 2022–2023.  **[ALLE_3380734_9]**  Managing a portfolio of several million SKUs in a made-to-order environment, we're confident in our capabilities regardless of tariff regimes or administrations.  **[ALLE_3380734_9]** 

5. **Return to Normal Seasonality**  
   **Q:** Will seasonality be different this year?  
   **A:** We expect a **return to normal seasonality** in 2024.  **[ALLE_3380734_5]**  Last year was **abnormal**, but typically, we have higher revenues in the middle two quarters, with more in the **back half of the year**.  **[ALLE_3380734_5]**  Think of 2024 as returning to historic patterns.  **[ALLE_3380734_5]** 

26216a7337e8a0a1acaa9eb5804121c14b7d0e4f01bf55ace2891ff20c6f3cb6

- The CEO mentioned that secondary home sales are at **"really low levels, really depressed levels,"** and mortgage rates are **"still quite high,"** leading to a **"flattish outlook"** for the residential market segment.  **[ALLE_3394103_13]**
- The International segment has had to **exit underperforming businesses** over the past couple of years, indicating struggles and potential challenges in growing that segment.  **[ALLE_3394103_10]**
- The potential reintroduction of tariffs could negatively impact earnings, as **"tariffs in general are not helpful"** to the company, and they need to wait and see how policies evolve.  **[ALLE_3394103_16]**

405f8f91283ae157bf937fc906f2c01b04ea074131a0679e2ecd6910eba5f9e5

1. **Operating Margin Expansion**  
   **Q:** What's driving the year-over-year margin expansion in 2024?  
   **A:** The company expects **margin expansion in 2024** driven largely by **price productivity exceeding inflation and investments**. Pricing will be the biggest growth driver at the midpoint of the top-line guidance. Actions have already been taken, including announced pricing in the nonresidential Americas business and cost actions in Q4 2023, positioning the company well to achieve this outlook.  **[ALLE_3374016_6]** 

2. **Non-Residential Growth Outlook**  
   **Q:** Can you unpack the nonresidential growth outlook by vertical?  
   **A:** The institutional verticals, making up about **45%** of the Americas business, are **stable** with positive data on starts. Commercial verticals are mixed: office new construction is **soft** and expected to continue so, multifamily is **slowing**, but data centers show **strength** with demand for high-end electronic products. The aftermarket, representing **50%** of Allegion's exposure, remains stable across all verticals. Overall, the company anticipates **low to mid-single-digit growth** in nonresidential.  **[ALLE_3374016_7]** **[ALLE_3374016_12]** 

3. **Electronics Growth Expectations**  
   **Q:** What's the outlook for electronics growth in 2024?  
   **A:** Electronics have been a strong growth driver, with **around 20%** growth in 2023. Long-term, electronics are expected to contribute **high single to low double-digit growth**. Despite tough comps, demand remains strong due to the migration to electronic access control. The company continues to invest, with new products like XE360 offering flexibility and interoperability, and plans a steady stream of product launches moving forward.  **[ALLE_3374016_11]** 

4. **Organic Growth Cadence**  
   **Q:** How will organic growth cadence look in 2024, given tough Q1 comps?  
   **A:** The first quarter of 2024 will present the most **challenging comp**, due to backlog burn in Q1 2023. While the company doesn't provide quarterly guidance, it expects a more **back-half loaded** top line in 2024, returning to more normal seasonality compared to 2023.  **[ALLE_3374016_8]** **[ALLE_3374016_10]** 

5. **Residential Volume Outlook**  
   **Q:** When will residential volumes bottom out in North America?  
   **A:** It's **tough to call**, but the current outlook assumes a **flat to slightly down** end market for residential. The company remains cautious, noting that meaningful changes in interest rates could spark secondary home sales, but no significant rebound is anticipated at this time.  **[ALLE_3374016_19]** 

6. **International Margins Improvement**  
   **Q:** What's driving the strong margin expansion in International despite negative growth?  
   **A:** The International segment has shown impressive margin expansion, with over **100 basis points** increase in Q4 despite negative organic growth. This is due to a **healthier portfolio** focused on electronics and software businesses, improved productivity, and pricing excellence brought from the Americas to International. The team is executing well, with businesses like SimonsVoss and Interflex driving growth and margins.  **[ALLE_3374016_9]** **[ALLE_3374016_18]** 

7. **Backlog Levels and Upside Potential**  
   **Q:** How does the backlog heading into 2024 compare to normal years, and where might upside come from?  
   **A:** The company has returned to **normal lead times** and book-and-ship business, unlike the extended backlogs in 2021 and early 2022. If there's upside, it could come from a better-than-expected performance in residential markets, where the company can leverage its **strong Schlage brand**.  **[ALLE_3374016_17]** 

8. **Volume Expectations**  
   **Q:** Are volumes expected to be flat or negative this year?  
   **A:** While not providing specific volume guidance, the outlook at the midpoint is **price-driven**, based on actions already announced. If markets perform better than expected, the company can participate in volume upside.  **[ALLE_3374016_14]** 

9. **Free Cash Flow Conversion**  
   **Q:** Is the cash flow conversion rate expected to return to historical levels?  
   **A:** On an adjusted net income basis, the cash flow conversion rate is at **90%**, which is roughly in line or slightly better than historical performance. The company improved working capital in 2023 and expects continued focus on inventory efficiency in 2024.  **[ALLE_3374016_15]** 

10. **Education Vertical Outlook**  
    **Q:** What's the outlook for the education vertical?  
    **A:** Education, part of the **institutional vertical that makes up 45% of the Americas business**, remains **stable**. K-12 and higher education have been consistent, with ongoing investments in safety and security products. The outlook aligns with **low to mid-single-digit growth** consistent with market indicators.  **[ALLE_3374016_12]** 

11. **Ongoing Investments in 2024**  
    **Q:** Are there any changes to investment levels in 2024?  
    **A:** The company will continue to **invest in its portfolio** to drive organic growth, especially in **software and electronics**. This ongoing commitment to investment is consistent with past practices and is expected to continue.  **[ALLE_3374016_16]** 

12. **Pricing Stickiness**  
    **Q:** Has pricing been stickier than expected earlier in the year?  
    **A:** Pricing has remained **sticky**, as the company prices for value. The industry implemented price increases due to significant inflation over multiple years. Pricing tends to lag inflation dynamics but remains in list prices over time.  **[ALLE_3374016_20]** 

13. **Non-Res Growth Deceleration**  
    **Q:** Is the deceleration in non-res growth due to channel destock?  
    **A:** The channel destocking was a **temporary phenomenon** caused by supply chain disruptions, now mostly past. Vertical mix volatility, with stable institutional but variable commercial sectors, influences growth rates. The company anticipates **low to mid-single-digit growth** in non-residential for 2024.  **[ALLE_3374016_21]** 

14. **Americas Margins Sustainability**  
    **Q:** Can Americas margins continue to expand without volume growth?  
    **A:** While volume growth is important long-term, in 2024, the company expects to operate more efficiently and **accelerate productivity**, providing tailwinds for margins. Margin expansion is not solely dependent on pricing but also on improved operational efficiency.  **[ALLE_3374016_22]** 

6dd75c081bac0e0323c494a18dff23643c19c517eb2532b0fe436c86552ed556

- **Margin Expansion Expected in 2024**: Allegion anticipates further margin expansion in 2024 due to increased efficiency and productivity, continuing the trend from 2023. The company plans to accelerate productivity, which should provide tailwinds for margins.  **[ALLE_3374016_22]**
- **Stable Nonresidential Growth Projected**: The company expects low to mid-single-digit growth in its nonresidential business for 2024, driven by strong institutional markets and a large installed base. Allegion believes it can deliver organic growth despite limited market tailwinds, leveraging the stability of late-cycle institutional verticals.  **[ALLE_3374016_5]** **[ALLE_3374016_21]**
- **Strengthening International Segment**: Allegion's International segment has shown significant margin expansion, becoming a much healthier portfolio. The company sees good growth potential in its International, Electronics, and Software Solutions businesses, which are contributing positively to margins and top-line growth.  **[ALLE_3374016_5]** **[ALLE_3374016_9]**

eb596930e9531bae01a6acf7e4b5ef2e015c1db93052a6f31be44030b6ef9f3e

- **Allegion's international specification business has historically been weak**, and improvements are still in early stages, potentially limiting growth in this segment.  **[ALLE_3403606_11]**
- **Electronics revenue declined high single digits compared to Q3 last year**, indicating challenges in a key growth driver for Allegion.  **[ALLE_3403606_2]**
- The company expects the **multifamily market to be soft for a while**, suggesting ongoing weakness in this commercial vertical.  **[ALLE_3403606_5]**

ba3871e638715c396a3528fe4f990571f94d1c3daeafe277b680ac69e8c7dbe3

1. **Market Outlook for 2025**  
   **Q:** What's the outlook for residential and nonresidential markets next year?  
   **A:** We see overall **stable markets** with signs of **Americas residential improving**.  **[ALLE_3403606_9]**  Institutional verticals will continue to lead nonresidential growth, supported by strong **municipal bond issuance**, especially in the **K-12 education** sector where we're strong.  **[ALLE_3403606_9]**  **Multifamily remains soft**, but **data centers are exceptionally strong**, and we participate well there.  **[ALLE_3403606_9]**  We still expect **organic growth** in this stable environment.  **[ALLE_3403606_9]** 

2. **Pricing Strategy Amidst Inflation**  
   **Q:** How are you approaching pricing in the current inflationary environment?  
   **A:** We're still in an **inflationary environment** and will **drive pricing** to cover inflationary pressures.  **[ALLE_3403606_10]**  We'll announce any pricing changes to the channel before an earnings call, but you can expect us to manage profitability by ensuring pricing covers inflation.  **[ALLE_3403606_10]** 

3. **Electronics Growth Expectations**  
   **Q:** What's the medium-term growth outlook for electronics globally?  
   **A:** Despite challenging comps in **2023**, we anticipate a more **normal comp environment** in **2025**.  **[ALLE_3403606_8]**  **Electronics adoption is still growing**, and the replacement cycle is just starting.  **[ALLE_3403606_8]**  We view electronics as a **high single to low double-digit growth driver** over the cycle.  **[ALLE_3403606_8]** 

4. **M&A Activity and Pipeline**  
   **Q:** How does the acquisition of SOSS impact your business, and what's your M&A outlook?  
   **A:** We're excited about the **SOSS acquisition**, which complements an existing business unit and primarily serves the **nonresidential markets** in the Americas.  **[ALLE_3403606_14]**  Overall, we're **excited about our M&A pipeline**; the environment is better than in '22 and '23.  **[ALLE_3403606_14]**  We'll continue to deploy cash in the best interest of shareholders, pursuing **accretive acquisitions** and share repurchases when appropriate.  **[ALLE_3403606_14]** 

5. **Productivity Improvements and Margins**  
   **Q:** Where are you in your productivity journey versus pre-COVID levels?  
   **A:** We're **really pleased** with our productivity.  **[ALLE_3403606_6]**  After supply chain challenges in '21 and early '22 that caused inefficiencies, we've become much more **efficient** in '23 and '24, driving productivity.  **[ALLE_3403606_6]**  We've achieved **margin expansion** this year and will continue to drive price and productivity to cover inflation and fund investments.  **[ALLE_3403606_6]** 

6. **Share Gains and Competition**  
   **Q:** Are you seeing any share gains in institutional verticals?  
   **A:** We don't disclose specific details, but any share gain likely came at the expense of **short-line suppliers** during our supply chain issues.  **[ALLE_3403606_13]**  Overall, we feel good about the institutional verticals and see them **leading the way** in the near term.  **[ALLE_3403606_13]** 

7. **International Spec Activity**  
   **Q:** How is international spec activity trending?  
   **A:** Historically, spec activity hasn't been our strength, but we're **investing** in capability.  **[ALLE_3403606_11]**  The acquisition of **Boss Door Controls** earlier this year enhances our spec-driven business in the U.K..  **[ALLE_3403606_11]**  We're building out human capital, and while it's early days, it's becoming an important part of our international business.  **[ALLE_3403606_11]** 

8. **Demand Related to ESSER Funding**  
   **Q:** Has the sunsetting of ESSER funding impacted demand?  
   **A:** **ESSER funding** wasn't much of a tailwind for us, and we don't see much change due to its sunsetting.  **[ALLE_3403606_12]**  Safety and security remain priorities for schools, and our new products have hit a **sweet spot** in the market, adding value to faculty and teachers.  **[ALLE_3403606_12]** 

ed9bde05a2080b963355e758987b8a5f311ad16474dce123551da19d576538fa

Allegion PLC (ALLE)

Financials