Allegion: 'We're performing at a high level’

DUBLIN—Allegion President and CEO John Stone cited two key factors that contributed to a strong third quarter: stable markets and strong execution.  

“Q3 marks another quarter of strong execution by the entire Allegion team, resulting in revenue growth and margin expansion, demonstrating the resilience of our business model,” he told investors during the company’s 2024 Q3 earnings call. “I'm especially pleased with the top-line growth in the quarter, and overall demand remains stable and is supported by our broad end-market exposure and specification expertise.”  

Among Allegion’s third-quarter financial highlights were revenues of $967.1 million, up 5.4% on a reported basis and up 3.3% on an organic basis as compared to Q3 2023. Adjusted net earnings were $189.3 million, or $2.16 per share, up 11.3% versus the prior year, and year-to-date 2024 available cash flow was $388 million, up 21.1% versus last year. 

In addition, Q3 adjusted operating margin and adjusted EBITDA margin both increased by 100 basis points, which Senior Vice President and Chief Financial Officer Mike Wagnes explained was driven by price and productivity in excess of inflation and investment, as well as favorable volume leverage. 

Stone noted that institutional markets have continued to lead, while commercial verticals have been more mixed.  

“We have accelerated capital deployment in 2024, returning cash to shareholders and growing our business with accretive acquisitions,” he said. “Our strong cash generation, balance sheet and pipeline of opportunities continue to position us well for future capital deployment, creating long-term value for our shareholders.”  

Stone noted Allegion’s continued investment in the core business to drive organic growth, citing the June introduction of a product line of exit devices, the Von Duprin 70 Series.  

“Our 70 Series combines the quality and trust Von Duprin is known for as the creator of this product category, with the performance and value ideal for many modern applications, ranging from warehouse, industrial, office, multifamily, retail and hospitality spaces,” he said. “We innovate for new markets, while still expanding the core, a capability that's difficult to match but is a strength of Allegion. With the Von Duprin 70 Series, we're leveraging more than a century of experience in developing high-performance exit devices to meet the safe entry and egress needs of customers today.”  

Stone also touched on Allegion’s recent acquisition of SOSS Door Hardware, a manufacturer of premium door hardware primarily sold across North American non-residential markets, which complements the company’s core mechanical portfolio with fire-rated heavy-duty solutions for industrial, commercial, and institutional spaces. 

“And like our other well-known brands, SOSS is an industry pioneer with more than a century of experience that makes it a category leader today,” he said. “SOSS is a small bolt-on with Allegion-like margins. We expect SOSS to deliver solid returns accretive to EPS in 2025 in a space we know well as a pure-play leader in security and access.” 

Allegion is raising its full-year guidance for EPS from $7.35 to $7.45, as well as affirming its overall revenue with some small updates at the segment level and affirming its available cash flow outlook of approximately $540 million to $570 million.  

“As we push to year end, I feel we're performing at a high level,” he said.  

For more information on Allegion’s Q3 earnings, go to https://investor.allegion.com.