AI interpretation based on checked source excerpts. Issuer assertions and evidence limitations remain explicit.
Policy quality-scores-2: six equally weighted categories. The overall score requires full coverage. Missing inputs are not zero. Qualitative grades are sourced interpretations, not probabilities. 6/6 · 18/10/2026
Moat50
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
structural advantage · 3/4 · Established brands and registered trademarks, combined with Americas price increases alongside volume growth, support a current differentiation advantage. This is stronger than an inference from margins alone, but brand causality and relative market share are not quantified.
durability · 2/4 · Long-lived brands support persistence, but historical category creation does not confer current exclusivity. Private labels and technological entrants require continuing reinvestment; a durable advantage across all markets is not demonstrated.
customer dependency · 1/4 · Large purchasers have strong bargaining power and some customers compete through private labels, indicating fragile supplier dependence in those channels. Certification complexity can support expertise, but customer lock-in or costly replacement is not established.
erosion resilience · 2/4 · 2025 tariff recovery and favorable second-quarter 2026 pricing/productivity demonstrate resilience. International first-half 2026 cost and volume/mix pressure provides realized counterevidence. Technological risk is prospective rather than proof of realized displacement.
Pricing power56
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
realized pricing · 3/4 · Americas second-quarter 2026 revenue growth included 4.0% pricing and 4.9% volume growth. The company also reported offsetting tariff inflation through pricing in 2025. These are realized outcomes, with stronger coverage of the Americas than International.
retention · 2/4 · Positive Americas volume alongside higher prices and electronic-product growth provide indirect evidence of continuing customer demand. They do not identify repeat buyers or establish retention rates, and International volume/mix weakness makes the evidence mixed.
margin resilience · 2/4 · Both segments improved margins during 2023–2025, and consolidated second-quarter 2026 margin rose to 22.1% from 21.5%. However, first-half International margin fell to 5.1% from 7.1%, while consolidated first-half operating income grew more slowly than revenue. Pricing's separate contribution cannot be isolated from productivity.
contractual freedom · 2/4 · Actual pricing actions demonstrate practical ability to change selling prices, but disclosed purchaser bargaining power limits cost recovery. Specific repricing clauses, contract durations and unilateral rights are not supplied, so broad contractual discretion is not established.
Predictability100
Five consecutive annual periods. Equal weights: nondeclining revenue frequency; revenue-growth volatility (5–40pp); positive FCF frequency; FCF-margin volatility (3–20pp). Stability indicator, not a growth forecast.
- Nondeclining revenue years (%)
- 100.00
- Revenue growth volatility (pp)
- 4.07
- Positive FCF years (%)
- 100.00
- FCF margin volatility (pp)
- 1.61
Financial strength73
Equal-weight grades: debt/FCF (1–8x), net debt/earnings before interest and tax (0–5x), interest service (1–12x), current ratio (0.75–2x). Earnings use reported operating income, or reported pretax profit plus reported interest expense when operating income is unavailable. Interest service uses earnings/interest expense; if unavailable, it uses reported operating cash flow/cash interest paid, without relabeling cash paid as accrued expense. Nonpositive cash flow/earnings score 0 for their service component; reported zero interest with a positive numerator scores 100. Net cash scores 100 for net leverage. Missing disclosures remain unavailable. General nonfinancial-company rubric, not a credit rating; exceptional and nonoperating gains are not normalized out. IFRS finance-cost and cash-flow classifications retain their reported scope.
- debtFcfGrade
- 73.03
- netDebtEbitGrade
- 62.21
- interestCoverageGrade
- 68.27
- currentRatioGrade
- 87.40
- Debt / FCF (x)
- 2.89
- Net debt / operating income (x)
- 1.89
- Interest coverage (x)
- 8.51
- Current ratio (x)
- 1.84
Capital allocation100
Three-year equal-weight indicators: pretax return on average invested capital (0–25%; equity + debt − cash, each year and its prior year), share-count growth (0–5%, lower better), share-based cost/revenue (2–20%, lower better), consolidated FCF/net income (0–1x). Return uses reported operating income or, if unavailable, EBIT calculated from reported pretax profit plus reported interest expense; exceptional/nonoperating gains are not normalized out. Share-based cost uses the reported cash-flow add-back or, if absent, separately reported recognized compensation expense; the latter never becomes an FCF adjustment. Nonpositive net income scores 0 for cash conversion; absent income/FCF stays unavailable. Nonpositive invested capital has no defined return and remains unavailable. Does not establish acquisition quality or buyback timing.
- 3-year pre-tax operating return (%)
- 25.86
- 3-year average dilution (%)
- -0.72
- 3-year average SBC / revenue (%)
- 0.73
- cashConversionGrade
- 100.00
Management69
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
capital discipline · 2/4 · 2025 operating cash flow of $783.8 million covered $98.1 million of capital expenditures. In first-half 2026, operating cash flow of $299.7 million covered capital expenditures, but acquisitions, dividends and buybacks together exceeded the remaining cash generation; net borrowing increased $50.0 million and cash declined. Spending is observable, but acquisition returns and repurchase value creation are not demonstrated.
incentive alignment · 3/4 · Actual PSU grants link awards to EPS targets and three-year relative shareholder returns. Ownership requirements and historical incentive payouts establish implemented alignment mechanisms. Individual ownership balances are missing, incentive-result adjustments permit discretion, and conditional change-in-control acceleration limits the strength of alignment.
execution · 3/4 · Multi-year segment revenue and operating-income gains, 2025 cash generation and Americas price/volume growth demonstrate strong aggregate execution. This assessment uses operating outcomes as indirect management evidence, not CEO biography. International deterioration and weaker first-half 2026 cash generation prevent an exceptional assessment.
governance · 3/4 · A serving independent chair, documented board attendance and an adopted enhanced clawback policy support functioning oversight. Conditional change-in-control vesting qualifies the broad compensation-practice claims. The passages do not establish exceptional governance effectiveness or the outcome of proposed 2026 AGM resolutions.
Evidence
We consider our CISA, Interflex, LCN, Schlage, SimonsVoss, Von Duprin and other associated trademarks to be among our most valuable assets, and we have registered these trademarks in a number of countries.
Business—registered trademarks and their stated importance · Filed 17/02/2026
Several of our brands were established more than 100 years ago, and many originally created their categories:
Business—brand operating histories · Filed 17/02/2026
Net Revenues Net revenues for the three months ended June 30, 2026, increased by 11.8%, or $97.1 million, compared to the same period in 2025, due to the following: Pricing 4.0 % Volume 4.9 % Acquisitions 2.9 % Total 11.8 % The increase in Net revenues was driven by higher volumes, improved pricing and the favorable impact of acquisitions.
MD&A—Allegion Americas second-quarter 2026 revenue bridge · Filed 23/07/2026
The security and access control product markets we serve often have unique certification and specification requirements, reflecting local regulatory requirements and highly variable end-user needs.
Risk Factors—local certification and specification requirements · Filed 17/02/2026
In 2025, we offset inflation due to tariffs with pricing actions.
MD&A—2025 tariff inflation offset through pricing · Filed 17/02/2026
Although certain proprietary intellectual property rights are important to our success, we do not believe we are materially dependent on any particular patent or license, or any particular group of patents or licenses.
Business—absence of material dependence on particular patents or licenses · Filed 17/02/2026
Further, in a number of our product offerings, we compete with our retail customers and technology partners who use their own private labels.
Risk Factors—competition from customer and partner private labels · Filed 17/02/2026
In addition, major customers who are volume purchasers are much larger than us and have strong bargaining power with their suppliers.
Risk Factors—large customers' bargaining power · Filed 17/02/2026
This limits our ability to recover cost increases through higher selling prices.
Risk Factors—constraint on recovering costs through selling prices · Filed 17/02/2026
The continual development of new technologies, such as artificial intelligence and machine learning, by existing and new competitors, including non-traditional competitors with significant resources, could adversely affect our ability to sustain operating margins and desirable levels of sales volumes.
Risk Factors—technological competition and well-resourced entrants · Filed 17/02/2026
Segment operating income for the six months ended June 30, 2026, decreased $4.3 million compared to the same period in 2025, and Segment operating margin for the six months ended June 30, 2026, decreased to 5.1% from 7.1%, due to the following: In millions Operating Income Operating Margin June 30, 2025 $ 27.4 7.1 % Inflation and investment spending in excess of pricing and productivity (7.0) (1.6) % Volume / product mix (6.9) (1.3) % Currency exchange rates 3.9 0.5 % Acquisitions / divestitures 11.8 1.7 % Acquisition / integration / restructuring expenses (6.1) (1.3) % June 30, 2026 $ 23.1 5.1 % The decrease in Segment operating income and Segment operating margin was driven by the unfavorable impact from inflation and investment spending in excess of pricing and productivity improvements, the unfavorable impact from volume/product mix and higher acquisition, integration and restructuring expenses.
MD&A—Allegion International first-half 2026 operating deterioration · Filed 23/07/2026
Operating margin, which we define as Operating income as a percentage of total Net revenues, for the three months ended June 30, 2026, increased to 22.1% from 21.5% for the same period in 2025, due to the following: In millions Operating Income Operating Margin June 30, 2025 $ 219.7 21.5 % Pricing and productivity in excess of inflation and investment spending 14.1 0.6 % Volume / product mix 14.7 0.6 % Currency exchange rates (0.8) (0.2) % Acquisitions / divestitures 8.8 (0.2) % Acquisition / integration / restructuring expenses (1.8) (0.2) % June 30, 2026 $ 254.7 22.1 % The increase in Operating income was driven by favorable volume/product mix, pricing and productivity improvements in excess of inflation and investment spending and the favorable impact from acquisitions/divestitures.
MD&A—consolidated second-quarter 2026 operating income and margin bridge · Filed 23/07/2026
F-34 Table of Contents A summary of operations and balance sheet information by reportable segments as of and for the years ended December 31, were as follows: Dollar amounts in millions 2025 2024 2023 Allegion Americas Net revenues $ 3,218.8 $ 3,012.4 $ 2,913.6 Cost of goods sold 1,751.6 1,666.5 1,637.9 Selling and administrative expenses 570.7 529.7 518.5 Segment operating income 896.5 816.2 757.2 Segment operating margin 27.9 % 27.1 % 26.0 % Depreciation and amortization 79.4 74.3 67.6 Capital expenditures 69.1 67.2 72.6 Total segment assets $ 2,732.5 $ 2,572.7 $ 2,457.7 Allegion International Net revenues $ 848.5 $ 759.8 $ 737.2 Cost of goods sold 477.4 441.4 430.6 Selling and administrative expenses 294.6 252.1 241.0 Impairment of intangible assets — — 7.5 Segment operating income 76.5 66.3 58.1 Segment operating margin 9.0 % 8.7 % 7.9 % Depreciation and amortization 49.4 41.0 40.0 Capital expenditures 23.5 24.2 16.2 Total segment assets $ 1,886.1 $ 1,146.0 $ 1,204.3 Reconciliation to earnings before income taxes Segment operating income from reportable segments $ 973.0 $ 882.5 $ 815.3 Unallocated corporate expense 113.5 101.8 106.9 Interest expense 101.0 102.0 93.1 Other income, net (9.9) (20.1) (1.9) Total earnings before income taxes $ 768.4 $ 698.8 $ 617.2 Other reportable segment information Depreciation and amortization from reportable segments $ 128.8 $ 115.3 $ 107.6 Unallocated depreciation and amortization 0.9 0.9 1.4 Total depreciation and amortization $ 129.7 $ 116.2 $ 109.0 Capital expenditures from reportable segments $ 92.7 $ 91.4 $ 88.8 Corporate capital expenditures, net of transfers to business segments 5.4 0.7 (4.6) Total capital expenditures $ 98.1 $ 92.1 $ 84.2 Assets from reportable segments $ 4,618.6 $ 3,718.7 $ 3,662.0 Unallocated assets(a) 605.1 769.1 649.5 Total assets $ 5,223.7 $ 4,487.8 $ 4,311.5 (a)Unallocated assets consist primarily of investments in unconsolidated affiliates, property, plant and equipment, net, ROU assets, deferred income taxes and cash and cash equivalents.
Note 20—2023–2025 segment results and capital expenditures · Filed 17/02/2026
For the three months ended June 30, 2026, Net revenues from the sale of electronic products in the Allegion Americas segment increased by a low-teens percent compared to the same period in the prior year.
MD&A—Americas second-quarter 2026 electronic-product revenue growth · Filed 23/07/2026
2 Table of Contents Allegion plc Condensed and Consolidated Statements of Cash Flows (Unaudited) Six months ended June 30, In millions 2026 2025 Cash flows from operating activities: Net earnings $ 322.7 $ 307.9 Adjustments to arrive at net cash provided by operating activities: Depreciation and amortization 71.3 61.9 Changes in assets and liabilities and other non-cash items (94.3) (55.6) Net cash provided by operating activities 299.7 314.2 Cash flows from investing activities: Capital expenditures (38.9) (38.8) Acquisition of businesses, net of cash acquired (75.5) (47.4) Other investing activities, net 1.2 3.6 Net cash used in investing activities (113.2) (82.6) Cash flows from financing activities: Debt repayments — (9.4) Proceeds from Revolving Facility 289.0 76.0 Repayments of Revolving Facility (239.0) — Net proceeds from debt 50.0 66.6 Dividends paid to ordinary shareholders (94.0) (87.8) Repurchase of ordinary shares (160.6) (80.0) Other financing activities, net (13.3) 2.0 Net cash used in financing activities (217.9) (99.2) Effect of exchange rate changes on cash and cash equivalents (4.2) 20.6 Net (decrease) increase in cash and cash equivalents (35.6) 153.0 Cash and cash equivalents - beginning of period 356.2 503.8 Cash and cash equivalents - end of period $ 320.6 $ 656.8 See accompanying notes to condensed and consolidated financial statements.
Condensed and Consolidated Statements of Cash Flows—first-half 2026 · Filed 23/07/2026
A-2 Table of Contents RECONCILIATION OF CASH PROVIDED BY OPERATING ACTIVITIES TO AVAILABLE CASH FLOW (In millions) Year ended December 31, 2025 2024 Net cash from operating activities $ 783.8 $ 675.0 Capital expenditures (98.1) (92.1) Available cash flow $ 685.7 $ 582.9 A-3 Table of Contents Table of Contents Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: KEEP THIS PORTION FOR YOUR RECORDS DETACH AND RETURN THIS PORTION ONLY THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
Appendix A—2025 and 2024 operating cash flow and capital expenditures · Filed 17/04/2026
In February 2024, 2025 and 2026, the Company’s Compensation and Human Capital Committee granted PSUs that were earned based 50% upon a performance condition, measured at each reporting period by earnings per share (“EPS”) performance in relation to pre-established targets for each performance period set by the Compensation and Human Capital Committee of the Board, and 50% upon a market condition, measured by the Company’s relative total shareholder return against a 50/50 blend of the S&P 400 Capital Goods Index and the S&P 500 Capital Goods Index over a three-year performance period.
Note 13—actual PSU grants and EPS/relative-return performance conditions · Filed 23/07/2026
v Table of Contents Practices we DO have Practices we DON’T have Incentive award metrics that align pay to strategic business performance measures Directors and executives must comply with robust share ownership requirements, with all directors and executives in compliance, or on track to achieve compliance, with these obligations Maintain enhanced incentive compensation clawback / recoupment policies Severance benefits triggered only upon a qualifying termination following a change-in-control Significant percentage of executive compensation target opportunity is contingent on performance measured against pre-established performance goals Conduct competitive benchmarking to ensure executive pay is aligned to market Independent compensation consultant is retained by and reports to the Compensation and Human Capital Committee Annual Say-on-Pay vote by shareholders Repricing of options without shareholder approval Hedging or pledging transactions, speculative transactions or short sales by executive officers or directors Automatic single-trigger equity vesting upon a change in control Excessive perquisites Excessive severance benefits or other non-performance-based compensation Employment agreements with defined term lengths Uncapped incentive compensation opportunities Tax gross-ups under change-in-control agreements Pay for Performance Our executive compensation program is market competitive for target total direct compensation, aligned with our peer group median and designed to result in greater variance in actual total compensation based on the Company’s performance.
Proxy highlights—ownership requirements and compensation practices · Filed 17/04/2026
vi Table of Contents Allegion’s strong performance resulted in a payout of 131.31% under the AIP (subject to region- and individual-specific performance) and a PSU payout of 125% for the 2023-2025 performance period.
Proxy highlights—actual 2025 annual incentive and 2023–2025 PSU payouts · Filed 17/04/2026
The Compensation and Human Capital Committee has adopted pre-established categories of potential adjustments for items causing significant differences from the assumptions contained in the AOP, including, but not limited to: ● The financial performance of any business acquired or divested during the performance period; ● Costs associated with Board-approved acquisitions or divestitures; ● Unusual or non-recurring gains or losses; ● Changes in applicable accounting principles and tax laws; and ● Significant Board-approved business restructurings or material interruptions (including facility closures, severance, professional fees or work stoppage).
Compensation Discussion and Analysis—permitted incentive-result adjustments · Filed 17/04/2026
Ms. Peters currently serves as independent Chair of the Board, a position to which she was elected in 2024.
Corporate Governance—serving independent board chair · Filed 17/04/2026
Each of the director nominees attended at least 89% of the Board meetings and 80% of the Committee meetings during the time that he or she served during 2025.
Proxy highlights—actual 2025 board and committee attendance · Filed 17/04/2026
· In 2024, we adopted an enhanced clawback policy, in addition to the clawback policy that we adopted in accordance with Rule 10D-1 of the Exchange Act, and the corresponding NYSE listing standards, that gives the Company the discretion to clawback incentive compensation, including time-based awards, if a recipient is terminated for cause.
Corporate Governance—enhanced clawback policy adopted in 2024 · Filed 17/04/2026
Under the 2013 Incentive Stock Plan (the “2013 Stock Plan”) and 2023 Incentive Stock Plan (the “2023 Stock Plan”), in the event of a CIC, outstanding unvested stock options and RSUs will immediately vest and become exercisable or payable, as applicable, unless a substantially equivalent alternate award is provided by the surviving entity following the CIC.
Executive Compensation—conditional change-in-control acceleration of options and RSUs · Filed 17/04/2026
Table of Contents ALLEGION PLC FORM 10-Q INDEX PART I - FINANCIAL INFORMATION 1 Item 1 - Financial Statements 1 Condensed and Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2026 and 2025 (Unaudited) 1 Condensed and Consolidated Balance Sheets at June 30, 2026 and December 31, 2025 (Unaudited) 2 Condensed and Consolidated Statements of Cash Flows for the six months ended June 30, 2026 and 2025 (Unaudited) 3 Notes to Condensed and Consolidated Financial Statements (Unaudited) 4 Item 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations 17 Item 3 - Quantitative and Qualitative Disclosures about Market Risk 29 Item 4 - Controls and Procedures 29 PART II - OTHER INFORMATION 30 Item 1 - Legal Proceedings 30 Item 1A - Risk Factors 30 Item 2 - Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities 30 Item 5 - Other Information 30 Item 6 - Exhibits 31 SIGNATURES 32 Table of Contents PART I – FINANCIAL INFORMATION Item 1 – Financial Statements Allegion plc Condensed and Consolidated Statements of Comprehensive Income (Unaudited) Three months ended Six months ended June 30, June 30, In millions, except per share amounts 2026 2025 2026 2025 Net revenues $ 1,151.5 $ 1,022.0 $ 2,185.1 $ 1,963.9 Cost of goods sold 634.0 555.5 1,213.1 1,074.9 Selling and administrative expenses 262.8 246.8 522.0 472.9 Operating income 254.7 219.7 450.0 416.1 Interest expense 24.8 24.6 49.0 49.3 Other expense (income), net 2.0 (5.3) 1.6 (8.8) Earnings before income taxes 227.9 200.4 399.4 375.6 Provision for income taxes 43.3 40.7 76.7 67.7 Net earnings $ 184.6 $ 159.7 $ 322.7 $ 307.9 Earnings per share: Basic net earnings $ 2.15 $ 1.86 $ 3.76 $ 3.57 Diluted net earnings $ 2.15 $ 1.85 $ 3.74 $ 3.56 Weighted-average shares outstanding: Basic 85.7 86.0 85.9 86.2 Diluted 86.0 86.4 86.3 86.6 Total comprehensive income $ 177.9 $ 250.4 $ 294.1 $ 435.2 See accompanying notes to condensed and consolidated financial statements.
Condensed and Consolidated Statements of Comprehensive Income—second-quarter and first-half 2026 · Filed 23/07/2026
