Allegion Q1 results, “Robust Demand” for NA non-residential business

DUBLIN – It’s been a strong start to 2023 for Allegion plc as the company released its first quarter financial results during this week’s scheduled earnings call.

The company posted an organic revenue growth of 15 percent, with electronics growth for the quarter exceeding 30 percent in the Americas. Allegion's cash generation improved significantly over last year and has raised outlooks on revenue, EPS and cashflow as a result. In the call Allegion President and Chief Executive Officer John Stone said that the company is seeing an ongoing robust demand for its North American non-residential businesses in addition to a strong international demand for electronics.

“We are seeing improvement in electronics components availability, and although supply is still short of demand, Americas Electronics Solutions grew by more than 30 percent this quarter,” Stone said during the call. “Residential markets remain rather soft in the quarter, particularly for the mechanical products and certain international markets also remain soft, particularly our global portable security business.”

Soft residential markets did little to slow down the good news for Allegion, however. Stone notes that the company has been increasing margins substantially, and that Q1 2023 represents the fourth quarter in a row of margin expansion for Allegion. The CEO credited the strong quarter among other things to an improving availability of electronics and the industry’s transformation to electronic smart hardware. The company is expecting organic growth for its Americas segment of between 7.5 percent and 9.5 percent, and total growth for its Access Technologies acquisition of between 15 percent and 17 percent.

Stone concluded with a nod to the company’s acquisition of Access Technologies in 2022. “Very pleased, very happy with the Access Technologies acquisition and how that’s starting to perform, very happy and remain committed about our margin expansion, and we will continue that into the future improvements in cash flow, and just overall, I am really proud of the entire Allegion team and our distribution partners to get us off to such a great start in 2023.”

The webcast and presentation of the Allegion earnings call can be found online at its investor’s website.