Security

Allegion Access Control Business & Financials 2023 Examined

In this Research Note, we examine Allegion plc, a pure-play provider of security and access solutions. Our analysis is based on their 2023 annual results, presentation, earnings call and 10K Report. We highlight growth in electronic security products, software and corporate venture capital investments in 2023. Note that we reviewed Allegion’s May 2023 Investor Day presentation in our previous article last year. Allegion, a US public company, headquartered in Ireland is the standalone business formed in 2013 from the former commercial and residential security businesses of Ingersoll Rand. The group is predominantly focused on mechanical security products and systems, which are currently undergoing digital transformation in their core access control, door and locking systems businesses. Allegion reports approximately 12,400 employees worldwide. Allegion 2023 Financials Full-year 2023 net revenues of $3.65 billion increased 11.6%, compared with the prior year. Net revenues increased 5.2% on an organic basis, excluding impacts of acquisitions, divestitures and foreign currency movements. […]

Stay ahead of the pack

with the latest independent smart building research and thought leadership.

Have an account? Login

Subscribe Now for just $200 per year per user (just $17 USD per month) for Access to Quality Independent Smart Building Research & Analysis!

What Exactly Do you Get?

  • Access to Website Articles and Notes. Unlimited Access to the Library of over 1,700 Articles Spanning 10 Years.
  • 10% discount on ALL Memoori Research reports for Subscribers! So if you only buy ONE report you will get your subscription fee back!
  • Industry-leading Analysis Every Week, Direct to your Inbox.
  • AND Cancel at any time
Subscribe Now

In this Research Note, we examine Allegion plc, a pure-play provider of security and access solutions. Our analysis is based on their 2023 annual results, presentation, earnings call and 10K Report.

We highlight growth in electronic security products, software and corporate venture capital investments in 2023. Note that we reviewed Allegion’s May 2023 Investor Day presentation in our previous article last year.

Allegion, a US public company, headquartered in Ireland is the standalone business formed in 2013 from the former commercial and residential security businesses of Ingersoll Rand. The group is predominantly focused on mechanical security products and systems, which are currently undergoing digital transformation in their core access control, door and locking systems businesses. Allegion reports approximately 12,400 employees worldwide.

Allegion 2023 Financials

Full-year 2023 net revenues of $3.65 billion increased 11.6%, compared with the prior year. Net revenues increased 5.2% on an organic basis, excluding impacts of acquisitions, divestitures and foreign currency movements. Favourable price was more than offset by lower volumes experienced in the mechanical portfolio.

Full-year 2023 operating income was $708.4 million, an increase of $122.0 million or 20.8%. Adjusted operating income for full-year 2023 was $805.6 million, an increase of $133.6 million or 19.9%.

Full-year 2023 operating margin was 19.4%, compared with 17.9%. The adjusted operating margin for full-year 2023 was 22.1%, compared with 20.5%. The 160-basis-point increase in adjusted operating margin is attributable to positive price and productivity net of inflation and investments. These increases were partially offset by lower volumes.

2024 Full-Year Outlook

The company expects full-year 2024 revenues to increase 1.5% to 3.5% on a reported basis and increase 1% to 3% organically, when compared to 2023, after excluding the expected impacts of acquisitions, divestitures and foreign currency movements.

Revenue Mix

The company reported approximately 20% global organic growth in electronics and software solutions in the year, with both Americas and International regions showing double-digit growth.

Allegion 2023 10K Report
Allegion 2023 10K Report, 20th February 2024

In 2023, Allegion reported 28% of revenues related to electronic security products, access control systems, time, attendance and workforce productivity systems. A further 5% of revenues related to services and software.

In 2022, Allegion increased its revenue mix to 30% electronics, which are defined as sales originating from electronic security products, access control systems, time, attendance and workforce productivity services and software.

Allegion Ventures

Allegion Ventures, the $50 million corporate venture unit of Allegion plc, is an important contributor to identifying emerging smart building technologies for its parent company.

The unit was formed in March 2018 to invest in technology and software that go beyond traditional approaches to bridge physical and digital security and create seamless user experiences. Funding rounds in 2023 include three strategic investments:

In October 2023, Allegion Ventures completed a $20 million investment in Ambient.ai, an AI-powered computer vision intelligence (CVI) company. Founded in 2017 and based in San Jose, California, Ambient.ai applies AI and CVI to existing security camera infrastructure – allowing their platform to deliver near human-level visual perception that analyzes actions and situational context to create efficient and accurate threat detection.

“This is the largest and most significant investment in the history of Allegion Ventures, reflecting the tremendous potential we see for future collaboration between Ambient.ai and Allegion,” CEO John H. Stone said. “Allegion’s connected hardware manages access and entry points, while Ambient’s platform provides contextual understanding to dramatically reduce false alarms in access control systems and vastly improve threat detection and response.”

In March 2023, Allegion made a strategic investment in Latchel. Founded in 2017, the startup helps rental property managers streamline maintenance operations. Allegion sees a potential to connect maintenance, concierge services and building access with this investment.

In February 2023, Allegion co-led an $11 million Series A round for self-storage startup, Stuf. Founded in 2020, Stuf modernizes self-storage and monetizes under-utilized real estate. The firm partners with property owners to turn basements, garages and other spaces in commercial buildings into storage, creating new cash flow opportunities for landlords and bringing valued amenities close to businesses and close to where people live and work.

Utilizing Stuf’s digital-first platform, users can book, pay for and access storage easily via their mobile devices. The company employs IoT to remotely manage its national portfolio, leveraging access control and security solutions to ensure its users have secure access to their storage units.

Having reported only 21% of revenues originating from electronic security in 2020, Allegion group is accelerating its technology-driven growth through product portfolio expansion, acquisitions and strategic investments.

This article was written by Daphne Tomlinson, Senior Research Associate at Memoori.

Most Popular Articles

SPIE
Energy

SPIE Technical Facility Management Business 2024 Examined

This Research Note examines the French public company, SPIE and its focus on building solutions, which is one of four strategic markets that the group addresses in central and northern Europe. This article covers the Group’s fields of expertise, its development since 2013 through platform and bolt-on acquisitions and its expansion in the Netherlands, based […]

Infogrid Acquicore Lawsuit
Smart Buildings

Infogrid Faces Lawsuit over 2022 Acquisition of Aquicore

Established in 2018, UK-based smart building firm Infogrid quickly made a splash in the market, picking up a range of high-value customers including banks, supermarkets, and restaurant chains, as well as the UK’s National Health Service (NHS) during the peak of the global pandemic. The firm has attracted $135.5m in investment (including debt financing) from […]

IWMS Spacewell Nemetshek 2023
Smart Buildings

Spacewell Smart Buildings Business & Financials 2023 Examined

In this Research Note, we examine Spacewell, part of the Manage segment of Nemetschek, which provides software for the management and operations phase in the building lifecycle. This article is based on their 2023 annual results, investor presentations, Annual Report of the parent company, published on 21st March 2024 and the group’s strategy in the […]

Subscribe to the Newsletter & get all our Articles & Research Delivered Straight to your Inbox.

Please enter a valid email

Please enter your name

Please enter company name

By signing up you agree to our privacy policy