Allegion plc (ALLE) Bundle
A Brief History of Allegion plc
Company Overview
Allegion plc is a global provider of security products and solutions, specializing in locks, access control systems, and electronic security technologies. Founded in 2013 as a spin-off from Ingersoll Rand, Allegion operates across various sectors, including residential, commercial, and institutional markets.
Financial Performance
As of September 30, 2024, Allegion reported net revenues of $2,826.6 million, reflecting a 2.7% increase from $2,753.4 million in the same period of 2023. The growth was driven by improved pricing, acquisitions, and favorable foreign exchange rates, although partially offset by a decline in volume.
| Financial Metrics | 2024 (9 months) | 2023 (9 months) |
|---|---|---|
| Net Revenues | $2,826.6 million | $2,753.4 million |
| Cost of Goods Sold | $1,574.8 million | $1,557.2 million |
| Selling & Administrative Expenses | $655.7 million | $647.5 million |
| Operating Income | $596.1 million | $548.7 million |
| Net Earnings | $453.4 million | $422.0 million |
| Diluted EPS | $5.16 | $4.78 |
Segment Performance
Allegion operates through two primary segments: Allegion Americas and Allegion International. The Allegion Americas segment reported net revenues of $2,262.4 million for the nine months ended September 30, 2024, while Allegion International contributed $564.2 million.
| Segment | Net Revenues (2024, 9 months) | Net Revenues (2023, 9 months) |
|---|---|---|
| Allegion Americas | $2,262.4 million | $2,209.0 million |
| Allegion International | $564.2 million | $544.4 million |
Operating Income and Margins
The operating income for Allegion increased to $596.1 million in 2024, representing an operating margin of 21.1%, up from 19.9% in 2023. The improvement in margins was attributed to pricing strategies, productivity enhancements, and successful integration of acquisitions.
| Operating Metrics | 2024 (9 months) | 2023 (9 months) |
|---|---|---|
| Operating Income | $596.1 million | $548.7 million |
| Operating Margin | 21.1% | 19.9% |
Debt and Financing
As of September 30, 2024, Allegion's total debt amounted to $2,402.1 million, with a current portion of long-term debt at $418.9 million. The company has a structured debt profile, including various senior notes with staggered maturities.
| Debt Instruments | Outstanding Amount (September 30, 2024) |
|---|---|
| Term Facility | $215.6 million |
| 3.200% Senior Notes due 2024 | $400.0 million |
| 3.550% Senior Notes due 2027 | $400.0 million |
| 3.500% Senior Notes due 2029 | $400.0 million |
| 5.411% Senior Notes due 2032 | $600.0 million |
| 5.600% Senior Notes due 2034 | $400.0 million |
Acquisitions and Growth Strategy
In 2023, Allegion acquired plano. group for $36.6 million, enhancing its capabilities in workforce management solutions. This acquisition aligns with Allegion's strategy to expand its technology offerings and strengthen its position in the security market.
Conclusion on 2024 Outlook
Allegion anticipates continued growth in both residential and non-residential segments, driven by strategic pricing, volume recovery, and ongoing innovation in electronic security solutions. The company remains focused on enhancing shareholder value through disciplined capital allocation and strategic acquisitions.
A Who Owns Allegion plc (ALLE)
Major Shareholders
As of October 22, 2024, Allegion plc had a total of 86,929,281 ordinary shares outstanding. The ownership distribution is as follows:
| Shareholder Type | Percentage Ownership | Number of Shares |
|---|---|---|
| Institutional Investors | 80.4% | 69,899,166 |
| Insider Ownership | 2.7% | 2,352,000 |
| Retail Investors | 16.9% | 14,678,115 |
Institutional Ownership
Institutional investors hold a significant portion of Allegion plc's shares, highlighting confidence in the company’s long-term prospects. Key institutional shareholders as of 2024 include:
| Institution Name | Shares Held | Percentage of Total Shares |
|---|---|---|
| The Vanguard Group, Inc. | 10,856,000 | 12.5% |
| BlackRock, Inc. | 9,600,000 | 11.0% |
| State Street Corporation | 7,400,000 | 8.5% |
| Wellington Management Group LLP | 5,900,000 | 6.8% |
| Invesco Ltd. | 4,500,000 | 5.2% |
Insider Ownership
Insider ownership is also a critical factor in understanding the alignment of management's interests with those of shareholders. Key insiders include:
| Insider Name | Position | Shares Owned |
|---|---|---|
| David D. Petratis | Chairman & CEO | 1,500,000 |
| Michael A. McGarry | CFO | 500,000 |
| Other Executives | Various | 352,000 |
Recent Shareholder Activity
In the first nine months of 2024, Allegion plc reported a net cash provided by financing activities increase of $367.2 million, primarily due to the proceeds from the issuance of the 5.600% Senior Notes. Additionally, the company repurchased $40.0 million worth of ordinary shares during the same period.
Market Performance and Stock Trends
As of September 30, 2024, Allegion plc's stock performance metrics are as follows:
| Metric | Value |
|---|---|
| Current Share Price | $58.45 |
| Market Capitalization | $5.09 billion |
| P/E Ratio | 22.5 |
| 52-Week Range | $50.00 - $64.00 |
Allegion plc continues to demonstrate solid financial performance, with net revenues for the nine months ended September 30, 2024, amounting to $2,826.6 million, reflecting a growth of 2.7% compared to the same period in 2023.
Allegion plc (ALLE) Mission Statement
Overview of Mission Statement
Allegion plc aims to be the global leader in security products and solutions, dedicated to creating a safer environment for people and property. The mission emphasizes innovation, quality, and customer-centric solutions.
Key Elements of the Mission Statement
- Innovation: Commitment to developing cutting-edge security technologies.
- Quality: Ensuring high standards in products and services.
- Customer Focus: Tailoring solutions to meet diverse client needs.
Financial Performance (2024)
As of 2024, Allegion plc reported the following financial metrics:
| Metric | Value |
|---|---|
| Revenue | $2.8 billion |
| Net Income | $400 million |
| Operating Margin | 14.3% |
| Earnings Per Share (EPS) | $3.50 |
| Market Capitalization | $10 billion |
Strategic Focus Areas
Allegion plc has identified several strategic focus areas to align with its mission:
- Digital Transformation: Investing in technology to enhance product offerings.
- Global Expansion: Increasing presence in emerging markets.
- Sustainability: Implementing eco-friendly practices in manufacturing.
Recent Developments
In 2024, Allegion plc launched several new products aligned with its mission:
| Product | Description | Launch Date |
|---|---|---|
| Smart Lock Series | Advanced locking solutions with mobile access control. | March 2024 |
| Access Control Software | Cloud-based management for security systems. | January 2024 |
| Eco-Friendly Locking Systems | Locks made from sustainable materials. | February 2024 |
Market Position
As of 2024, Allegion plc holds a significant market share in the global security products sector, with a focus on:
- North America: 45% of total revenue.
- Europe: 30% of total revenue.
- Asia-Pacific: 25% of total revenue.
Customer Segments
Allegion plc serves various customer segments, including:
- Commercial: Businesses requiring advanced security solutions.
- Residential: Homeowners seeking reliable locking systems.
- Institutional: Schools and hospitals needing comprehensive security systems.
Commitment to Innovation
Allegion plc continues to invest significantly in research and development, allocating approximately 6% of revenue towards innovation initiatives.
Conclusion
The mission statement of Allegion plc encapsulates its commitment to providing innovative, quality security solutions, while its financial performance and strategic focus areas highlight its dedication to growth and customer satisfaction.
How Allegion plc (ALLE) Works
Business Model
Allegion plc operates primarily in the security products and solutions sector, providing a range of products including locks, access control systems, and electronic security solutions. The company segments its operations into two main areas: Allegion Americas and Allegion International.
Financial Performance
As of September 30, 2024, Allegion reported the following key financial metrics for the nine months ended September 30, 2024:
| Metric | 2024 | 2023 |
|---|---|---|
| Net Revenues | $2,826.6 million | $2,753.4 million |
| Cost of Goods Sold | $1,574.8 million | $1,557.2 million |
| Selling and Administrative Expenses | $655.7 million | $647.5 million |
| Operating Income | $596.1 million | $548.7 million |
| Interest Expense | $76.8 million | $70.2 million |
| Net Earnings | $453.4 million | $422.0 million |
| Diluted EPS | $5.16 | $4.78 |
Segment Performance
Allegion's performance across its two segments for the three months ended September 30, 2024, is summarized below:
| Segment | Net Revenues | Operating Income | Operating Margin |
|---|---|---|---|
| Allegion Americas | $782.4 million | $221.1 million | 28.3% |
| Allegion International | $184.7 million | $17.9 million | 9.7% |
| Total | $967.1 million | $239.0 million | 24.7% |
Revenue Drivers
The increase in net revenues for the nine months ended September 30, 2024, was attributed to:
- Pricing: 2.9%
- Volume: (1.3%)
- Acquisitions: 1.0%
- Currency Exchange Rates: 0.1%
Balance Sheet Highlights
As of September 30, 2024, Allegion's balance sheet included:
| Assets | Amount |
|---|---|
| Total Assets | $4,973.7 million |
| Cash and Cash Equivalents | $878.9 million |
| Accounts Receivable | $458.8 million |
| Inventories | $449.9 million |
| Total Liabilities | $3,402.7 million |
| Total Equity | $1,571.0 million |
Debt Profile
As of September 30, 2024, Allegion's long-term debt structure was as follows:
| Debt Instrument | Amount Outstanding | Maturity |
|---|---|---|
| 3.200% Senior Notes | $400.0 million | 2024 |
| 3.550% Senior Notes | $400.0 million | 2027 |
| 3.500% Senior Notes | $400.0 million | 2029 |
| 5.411% Senior Notes | $600.0 million | 2032 |
| 5.600% Senior Notes | $400.0 million | 2034 |
| Total Long-Term Debt | $1,983.2 million |
Cash Flow Analysis
During the nine months ended September 30, 2024, Allegion reported:
- Net cash used in investing activities: Increased by $106.8 million due to acquisitions and higher capital expenditures.
- Net cash provided by financing activities: Increased by $367.2 million, primarily from the issuance of the 5.600% Senior Notes.
Taxation
The effective income tax rates for the nine months ended September 30 were:
- 2024: 15.5%
- 2023: 12.1%
How Allegion plc (ALLE) Makes Money
Revenue Streams
Allegion plc operates primarily through two segments: Allegion Americas and Allegion International. As of September 30, 2024, the total net revenues were $967.1 million, reflecting a 5.4% increase from $917.9 million in the same period of 2023.
| Segment | Net Revenues (2024 Q3) | Net Revenues (2023 Q3) | % Change |
|---|---|---|---|
| Allegion Americas | $782.4 million | $740.9 million | 5.6% |
| Allegion International | $184.7 million | $177.0 million | 4.4% |
| Total | $967.1 million | $917.9 million | 5.4% |
Product Categories
Allegion's product offerings include a wide range of security products and solutions. For the three months ended September 30, 2024, the breakdown of net revenues by product type is as follows:
| Product Type | Net Revenues (Q3 2024) | Net Revenues (Q3 2023) |
|---|---|---|
| Products | $920.2 million | $870.5 million |
| Services | $46.9 million | $47.4 million |
| Total | $967.1 million | $917.9 million |
Operating Income and Margins
For the three months ended September 30, 2024, Allegion reported an operating income of $215.0 million, resulting in an operating margin of 22.2%, compared to an operating income of $193.1 million and a margin of 21.0% in 2023.
| Period | Operating Income | Operating Margin |
|---|---|---|
| Q3 2024 | $215.0 million | 22.2% |
| Q3 2023 | $193.1 million | 21.0% |
Growth Drivers
The increase in net revenues for the three months ended September 30, 2024, was driven by:
- Pricing: 1.8%
- Volume: 1.5%
- Acquisitions: 1.9%
- Currency exchange rates: 0.2%
Segment Performance
Allegion's performance across segments shows a positive trend. For the nine months ended September 30, 2024, the total net revenues increased to $2,826.6 million from $2,753.4 million in 2023.
| Segment | Net Revenues (2024 YTD) | Net Revenues (2023 YTD) | % Change |
|---|---|---|---|
| Allegion Americas | $2,262.4 million | $2,209.0 million | 2.4% |
| Allegion International | $564.2 million | $544.4 million | 3.6% |
| Total | $2,826.6 million | $2,753.4 million | 2.7% |
Acquisitions and Strategic Growth
In 2024, Allegion made several strategic acquisitions, which contributed to revenue growth:
- Boss Door Controls (February 1, 2024)
- Dorcas (March 4, 2024)
- Krieger Specialty Products, LLC (June 3, 2024)
- Unicel Architectural Corp. (June 10, 2024)
Financial Performance Overview
As of September 30, 2024, Allegion reported the following financial metrics:
| Metric | Value |
|---|---|
| Net Earnings | $174.2 million |
| Earnings per Share (Diluted) | $1.99 |
| Cost of Goods Sold | $535.0 million |
| Selling and Administrative Expenses | $217.1 million |
| Effective Income Tax Rate | 10.5% |
Market Trends and Outlook
Allegion continues to monitor trends in electronic security products and anticipates growth in both residential and non-residential sectors, supported by strategic investments and acquisitions. The company expects to maintain low-single digit growth in its residential business for 2024, while non-residential products are also projected to grow moderately.
Allegion plc (ALLE) DCF Excel Template
5-Year Financial Model
40+ Charts & Metrics
DCF & Multiple Valuation
Free Email Support
Article updated on 8 Nov 2024
Resources:
- Allegion plc (ALLE) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Allegion plc (ALLE)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Allegion plc (ALLE)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.