Allegion(US:ALLE)2025-07-24 10:04Financial Performance - Net revenues for Q2 2025 were $1,022.0 million, a 5.8% increase from $965.6 million in Q2 2024[10] - Operating income for the first half of 2025 reached $416.1 million, up 9.2% from $381.1 million in the same period of 2024[10] - Net earnings for the first six months of 2025 were $307.9 million, compared to $279.2 million in 2024, reflecting a 10.3% increase[14] - The company reported a total comprehensive income of $250.4 million for Q2 2025, compared to $150.3 million in Q2 2024[10] - Allegion's basic net earnings per share for the first half of 2025 were $3.57, compared to $3.19 in the same period of 2024, marking a 11.9% increase[10] - Net earnings for the six months ended June 30, 2025, were $307.9 million, compared to $279.2 million in 2024, reflecting a strong performance[106] - For the six months ended June 30, 2025, net revenues increased by 6.7%, or $99.3 million, compared to the same period in 2024, driven by higher volumes, acquisitions, and improved pricing[121] Assets and Liabilities - Total assets as of June 30, 2025, were $4,914.8 million, an increase from $4,487.8 million at the end of 2024[12] - Allegion's long-term debt stood at $2,042.3 million as of June 30, 2025, up from $1,977.6 million at the end of 2024[12] - The total debt as of June 30, 2025, was $2,086.1 million, reflecting the company's financial obligations[56] - The Company had $2,079.1 million in total borrowings outstanding as of June 30, 2025, compared to $2,012.5 million at December 31, 2024[40] - Total current assets for Allegion US Hold Co decreased from $954.9 million as of December 31, 2024, to $715.4 million as of June 30, 2025[154] - Total noncurrent liabilities for Allegion US Hold Co decreased from $4,145.8 million as of December 31, 2024, to $3,775.6 million as of June 30, 2025[154] Acquisitions and Investments - The company completed acquisitions totaling approximately $65.0 million during the first half of 2025, including Next Door and Lemaar[20][21][24] - The company plans to expand its global electronics portfolio through the acquisition of ELATEC for approximately $389.0 million[27] - The total net assets acquired and liabilities assumed from the 2024 acquisitions amounted to $130.1 million, including $62.5 million in goodwill and $68.4 million in intangible assets[35] - The company completed several acquisitions in 2025, including ELATEC for €330.0 million (approximately $389.0 million), enhancing its global electronics portfolio[91] Cash Flow and Liquidity - Cash and cash equivalents increased to $656.8 million as of June 30, 2025, from $503.8 million at the end of 2024[12] - Net cash provided by operating activities during the six months ended June 30, 2025, increased by $90.1 million compared to the same period in 2024, totaling $314.2 million[138] - The company expects cash flows from operations to be sufficient to maintain a sound financial position and liquidity for at least the next 12 months[136] Shareholder Returns - The company repurchased $80.0 million of ordinary shares during the six months ended June 30, 2025, with approximately $160.0 million remaining under the share repurchase authorization[62] - The company repurchased approximately 0.6 million shares for $80.0 million during the six months ended June 30, 2025[94] - The Board of Directors reauthorized a share repurchase program allowing for the repurchase of up to $500 million of the company's ordinary shares[168] Tax and Compliance - The effective income tax rate for the six months ended June 30, 2025, was 18.0%, a slight decrease from 18.3% in 2024[72] - The effective income tax rate for the three months ended June 30, 2025, was 20.3%, up from 17.8% in 2024, mainly due to legislative changes and income mix[105] - The company has maintained its assertion of permanent reinvestment of earnings in jurisdictions where substantial investments are made, with no material changes required as of June 30, 2025[145] - The company’s management has concluded that disclosure controls and procedures are effective as of June 30, 2025[162] Market and Operational Insights - Demand for electronic security products remains strong, contributing to mid-single digit revenue growth in the second quarter of 2025 compared to the same period in 2024[86] - The company anticipates continued growth in revenues from non-residential products for the remainder of 2025, while residential product revenues are expected to remain soft[118] - The company estimates that approximately 20-25% of its cost of goods sold is sourced from Mexico, with less than 5% from China[87] Other Financial Metrics - The company reported an intangible asset amortization expense of $32.5 million for the six months ended June 30, 2025, compared to $31.8 million for the same period in 2024[39] - The warranty liability balance at the end of June 2025 was $23.5 million, slightly up from $22.5 million at the end of June 2024[81] - The foreign currency exchange gain for the six months ended June 30, 2025, was $1.5 million, compared to a gain of $0.8 million in 2024[70] - Allegion plc's total equity increased from $1,500.7 million at December 31, 2024, to $1,786.5 million at June 30, 2025, reflecting a growth of approximately 18.9%[62] - Allegion plc's accumulated other comprehensive loss decreased from $(331.6) million at December 31, 2024, to $(204.3) million at June 30, 2025, indicating a reduction of approximately 38.3%[64]