Core Insights - Allegion US is showcasing the integration of Schlage XE360™ electronic locks with Zentra, enhancing access control for multifamily properties [1][2] - The partnership combines Zentra's cloud technology with Schlage XE360™ Series, providing a user-friendly experience for property managers [2][3] Product Features - Schlage XE360™ Series includes various configurations such as tubular, mortise, and exit trims, offering a cohesive look for properties [4] - The innovative FleX Module™ allows for easy upgrades from offline to real-time connected solutions, adapting to future security trends [4] Market Impact - The integration aims to simplify access management for multifamily properties, meeting evolving demands in security and connectivity [5] - Property managers will benefit from enhanced tools for managing high-traffic communities and improving reporting visibility [4][5] Company Background - Allegion designs and manufactures security and access solutions, with a strong portfolio of brands including Schlage® and CISA® [7] - The company focuses on innovative solutions that enhance safety in residential and commercial environments [7]

Group 1 - Allegion plc (ALLE) has acquired Nova Hardware Pty Ltd (Novas) to enhance its door hardware product offerings, although the financial terms of the transaction remain undisclosed [1][7] - Novas specializes in designing and selling door hardware products, which will allow Allegion to strengthen its market presence in the multifamily and commercial sectors in Australia [2][7] - The acquisition aligns with Allegion's growth strategy focused on strategic acquisitions and innovation, as seen in previous acquisitions like Trimco Hardware and Lemaar Pty Ltd [4][5] Group 2 - Allegion's performance is bolstered by the Allegion Americas segment, which is experiencing increased demand for non-residential products across various end markets, including education and hospitality [6] - The company currently holds a Zacks Rank of 3 (Hold), with a year-to-date stock gain of 5.7%, outperforming the industry growth of 4.6% [6] - Rising costs of sales due to higher material costs and increasing selling and administrative expenses present challenges to Allegion's profitability [9]

Industry Overview - The Zacks Security and Safety Services industry is positioned to benefit from strong demand for security products and solutions, driven by increased awareness of safety for people and infrastructure [1][4] - The industry includes firms providing advanced security solutions for residential, commercial, and institutional purposes, including personal defense and hazard detection [3] Demand Drivers - Rising instances of terrorism and criminal activities are increasing the demand for security services, with governments and businesses deploying IP-based cameras for enhanced surveillance [4] - Urbanization and the need for infrastructure safety are also contributing to industry growth, alongside a surge in demand for cybersecurity products due to hacking incidents [4] Investment Trends - Increased government budgets and funding are encouraging significant investments in research and development for advanced security products [5] - Collaboration between government agencies and industry players is aimed at strengthening security infrastructure in smart cities [5] Financial Metrics - The industry's long-term debt/capital ratio is 0.62, significantly higher than the Zacks S&P 500 composite index's 0.28, indicating a focus on innovation and product development [6] - The industry currently trades at a forward P/E of 16.56X, lower than the S&P 500's 21.88X and the sector's 19.35X, suggesting potential undervaluation [13] Performance Comparison - The Zacks Security and Safety Services industry has returned 7.7%, underperforming the S&P 500's 12% growth but outperforming the broader Industrial Products sector, which declined by 1.9% [10] Key Players - **Life360**: Engaged in location tracking and safety services, with a 42.7% share price increase over the past six months and a 9.1% upward revision in 2025 earnings estimates [18][19] - **Allegion**: A leading provider of security products, benefiting from demand in non-residential markets, with a 4.4% share price increase and a 0.5% upward revision in earnings estimates [22][23] - **Alarm.com**: Focused on IoT solutions, experiencing strong momentum in its SaaS business, with a 0.4% upward revision in earnings estimates [26][27] - **MSA Safety**: Develops safety products with a 12% share price increase in the past month, consistently surpassing earnings estimates [30][31]

Core Viewpoint - Allegion plc is experiencing strong momentum across its segments, driven by stable demand in various end markets and strategic acquisitions, which are enhancing its product portfolio and market position [1][2][3]. Group 1: Segment Performance - The Allegion Americas segment is benefiting from stable demand in education, healthcare, government, hospitality, and retail markets, along with acquisitions like Next Door Company and Trimco [1][2]. - The Allegion International segment is seeing increased demand for electronic security products, supported by heightened awareness of security and safety [1]. Group 2: Acquisitions and Portfolio Expansion - Allegion acquired Trimco Hardware in April 2025, enhancing its specialty solutions and innovation capabilities within the Allegion Americas segment [2]. - The acquisition of Lemaar Pty Ltd in March 2025 bolstered Allegion's security and accessibility portfolio in Australia, integrating it into the Allegion International segment [2]. - The acquisition of Next Door Company in February 2025 expanded Allegion's doors and frames portfolio, while Krieger Specialty Products and Unicel Architectural Corp were also acquired to strengthen its non-residential business [3]. Group 3: Financial Performance and Shareholder Returns - In Q1 2025, Allegion paid dividends totaling $43.6 million, a 3.6% increase year-over-year, and repurchased shares worth $40 million, with an additional $200 million remaining under its buyback program [4]. - Allegion announced a 6% increase in its quarterly dividend rate, now at 51 cents per share [4]. Group 4: Market Performance - Year-to-date, Allegion's shares have gained 9.3%, outperforming the industry growth of 5.6% [5]. Group 5: Cost Challenges - Allegion is facing rising costs, with a 3.4% year-over-year increase in the cost of sales and a 3.1% rise in selling and administrative expenses in Q1 2025, attributed to investments in new products and growth initiatives [7][8]. Group 6: International Expansion Risks - Allegion plans to expand into new overseas markets but faces risks from currency fluctuations, particularly the impact of a strengthening U.S. dollar, which affected margins by 0.8% in Q1 [9].

Welcome to Our Webcast Our Event Will Start Soon Creating a Safer & More Accessible World Investor & Analyst Day May 6, 2025 Cautionary Statements Forward-Looking Statements This presentation contains "forward-looking statements," which are statements that are not historical facts. 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, ...

Allegion (ALLE) 2025 Capital Markets Day Summary Company Overview - Allegion is a high-quality industrial company focused on personal safety and security, with a mission to create a safer and more accessible world [7][10][16]. Core Industry Insights - The increasing need for personal safety and security is a significant secular trend, with threats multiplying from various sources, including natural disasters and violence [7][9]. - Allegion's products, such as tornado and hurricane-proof doors, are designed to withstand extreme conditions, demonstrating the company's commitment to safety [7][8]. - The company has a strong presence in the non-residential construction market, particularly in school safety and electronic solutions [21][22]. Financial Performance and Growth Strategy - Allegion has demonstrated resilience with mid-single-digit total growth from 2020 to 2024, despite challenges like supply chain issues and inflation [28][29]. - The company aims for organic growth in the mid-single-digit range, with an increased focus on electronics and acquisitions contributing to this growth [30][31]. - Allegion has a disciplined approach to capital deployment, focusing on profitable growth and maintaining a balanced investment strategy [31][32]. Mergers and Acquisitions (M&A) - The company is actively pursuing acquisitions that align with its core business, particularly in mechanical and electromechanical portfolios, as well as complementary software and services [34][38]. - Recent acquisitions include Dorkus, a manufacturer of electric strikes, enhancing Allegion's product offerings in the Americas [39]. - Allegion's M&A strategy focuses on high-margin, fast-growing specialty applications, aiming to integrate these companies quickly to accelerate growth [37][38]. Unique Business Model - Allegion's demand creation model is unique, with a significant portion of its team focused on influencing the design phase of building projects, ensuring that their products are specified early in the process [42][46]. - The company leverages technology, such as the Overture platform, to streamline the specification process and enhance collaboration with architects and contractors [57][60]. - Allegion emphasizes long-term relationships with end-users, providing training and support to ensure effective product use and maintenance [64][66]. International Expansion - Allegion is not a container company; it focuses on serving local markets with tailored solutions developed and manufactured locally [75]. - The company is leveraging global best practices while adapting to local market needs, enhancing its competitive edge [76][82]. - Investments in automation across various facilities are aimed at improving efficiency, quality, and safety, ultimately benefiting customer service [83][84]. Key Takeaways - Allegion is well-positioned for accelerated growth, driven by a strong mission, innovative products, and a unique demand creation model [12][25]. - The company's focus on safety, technology integration, and strategic acquisitions will continue to enhance its market position and shareholder value [25][30]. - Allegion's commitment to employee engagement and a strong corporate culture contributes to its competitive advantage in the industry [18][20].

Group 1 - Allegion (NYSE: ALLE) experienced single-digit growth in its topline as it entered 2025, despite facing weakness in the international segment [1] - The demand environment in the Americas segment remains stable, driven by strength in the non-residential end market [1] - Expectations indicate that the Americas segment will continue to perform well [1]

Group 1 - Allegion plc reported quarterly earnings of $1.86 per share, exceeding the analyst consensus estimate of $1.67 per share [1] - The company achieved quarterly sales of $941.90 million, surpassing the analyst consensus estimate of $919.64 million [1] - Allegion affirmed its FY2025 adjusted EPS guidance of $7.65-$7.85 and revenue growth guidance of 1% to 3% [1] Group 2 - Allegion's President and CEO John H. Stone expressed pride in the team's execution and highlighted the strong performance of the Americas non-residential business [2] - Allegion shares experienced a decline of 1.5%, trading at $137.38 [2] Group 3 - Following the earnings announcement, Barclays analyst Julian Mitchell maintained an Underweight rating on Allegion and raised the price target from $126 to $128 [3] - Baird analyst Timothy Wojs maintained a Neutral rating and increased the price target from $144 to $150 [3]

Financial Data and Key Metrics Changes - Q1 2025 revenue was $941.9 million, an increase of 5.4% compared to Q1 2024 [16] - Organic revenue increased by 4%, driven by favorable pricing and volume, particularly in the non-residential business in The Americas [17] - Adjusted earnings per share (EPS) for Q1 was $1.86, up $0.31 or 20% year-over-year [18] - Available cash flow was $83.4 million, up nearly 250% compared to the previous year [20] Business Line Data and Key Metrics Changes - The Americas segment reported revenue of $757.8 million, up 6.8% on a reported basis and 4.9% organically [21] - The non-residential business in The Americas saw high single-digit organic growth, while the residential business declined mid-single digits [23][24] - International segment revenue was $104.1 million, down 0.3% on a reported basis but up 0.9% organically [26] Market Data and Key Metrics Changes - The Americas experienced mid-single-digit growth and solid margin expansion, indicating strong demand and effective channel partnerships [7] - The residential market remains soft due to high mortgage rates and tariff uncertainties, with expectations to continue at low levels until a significant catalyst occurs [104] Company Strategy and Development Direction - The company is focused on capital allocation for growth, including organic investments and accretive acquisitions, having closed three acquisitions in 2025 [12][14] - Allegion is committed to maintaining its dividend policy, having announced its eleventh consecutive increase at the beginning of the year [15] - The company aims to offset tariff costs through pricing actions while remaining agile in response to market conditions [33][34] Management's Comments on Operating Environment and Future Outlook - Management affirmed the 2025 full-year outlook for adjusted EPS of $7.65 to $7.85, citing resilience in non-residential markets [9][31] - The company anticipates some headwinds in Q2 due to a lag in pricing actions relative to tariff impacts [43] - Positive internal indicators in the non-residential business and a strong aftermarket contribute to confidence in the full-year guidance [125] Other Important Information - Allegion's new product launches, including smart locks, are expected to drive growth in the electronics segment [10][11] - The company has a strong balance sheet with a net debt to adjusted EBITDA ratio of 1.6 times, supporting continued capital deployment [30] Q&A Session Summary Question: Inquiry about tariffs and pricing actions - Management acknowledged a potential lag between tariff impacts and pricing actions, expecting to cover tariff costs at the operating profit and EPS level for the full year [42][44] Question: Changes in institutional verticals and CapEx priorities - Management noted that institutional verticals like healthcare and education remain resilient, with a long tail for projects funded by municipal bonds [55][56] Question: Market dynamics and project paralysis - Management indicated that while some projects may be paused due to interest rate concerns, there is optimism for future project progression as rates stabilize [120] Question: Outlook for the residential market - Management expressed that the residential market is expected to remain soft due to high mortgage rates and construction costs, with a focus on aftermarket opportunities [104][106] Question: Pricing and productivity outlook - Management confirmed expectations for price and productivity to remain neutral for the year, despite fluctuations in quarterly performance [110][111]

Financial Data and Key Metrics Changes - Q1 2025 revenue was $941.9 million, an increase of 5.4% compared to Q1 2024 [16] - Organic revenue increased by 4%, driven by favorable pricing and volume, particularly in the non-residential business in The Americas [17] - Adjusted earnings per share (EPS) for Q1 was $1.86, up $0.31 or 20% year-over-year [18] - Available cash flow was $83.4 million, up nearly 250% compared to the previous year [20] Business Line Data and Key Metrics Changes - The Americas segment reported revenue of $757.8 million, up 6.8% on a reported basis and 4.9% organically [21] - The non-residential business in The Americas saw high single-digit organic growth, while the residential business declined mid-single digits [23][24] - International segment revenue was $104.1 million, down 0.3% on a reported basis but up 0.9% organically [26] Market Data and Key Metrics Changes - The Americas experienced mid-single-digit growth in the non-residential sector, indicating strong demand [7] - The residential market is expected to remain soft due to high mortgage rates and construction costs [104] - The company anticipates tariff costs of approximately $80 million in 2025, which they expect to offset through pricing actions [33] Company Strategy and Development Direction - The company is focused on capital allocation for organic growth and has made three bolt-on acquisitions in 2025 to enhance its portfolio [12][13] - Allegion is committed to returning capital to shareholders while investing in growth opportunities [8] - The company is maintaining its full-year outlook for adjusted EPS of $7.65 to $7.85 [9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the non-residential markets, particularly in institutional verticals [31] - The company remains agile in response to changing market conditions and is closely monitoring tariff impacts [46][47] - Positive internal indicators in the non-residential business provide confidence for the full-year guidance [125] Other Important Information - Allegion announced its eleventh consecutive dividend increase, amounting to approximately $44 million in Q1 [15] - The company is set to release innovative products in the smart lock segment later in the year [10][11] Q&A Session Summary Question: Inquiry about tariff impacts and pricing actions - Management acknowledged a potential lag in pricing actions relative to tariff impacts, expecting to cover tariff costs at the operating profit and EPS level for the full year [42][43] Question: Changes in institutional verticals and CapEx priorities - Management noted that institutional verticals like healthcare and education remain resilient, with ongoing projects supported by strong municipal bond issuances [55][56] Question: Market share and competition in the residential market - Management indicated that the residential market is expected to remain soft, but they are focusing on innovation in electronic products to drive growth [104][106] Question: Revenue guidance and pricing actions - Management clarified that the revenue guidance does not assume any uplift from pricing actions related to tariffs, but the operating profit guidance does reflect those actions [114][115] Question: Momentum in the channel and recession concerns - Management reported positive momentum in the non-residential sector and expressed confidence in the outlook despite broader economic concerns [124][125] Question: European market outlook - Management noted optimism in the German market and highlighted strong performance in Italy, but reiterated the need to maintain the current guidance [127][129]