Allegion PLC (ALLE) is unlocking its potential as a standalone company after its spinoff from Ingersoll Rand, according to CEO David D. Petratis. He was speaking at Baird’s 2014 Industrial Conference, held at the Four Seasons Hotel in Chicago, Illinois.
“We touch you every day,” said Petratis, detailing the many ways the company’s security products are used in homes and industries. The company has 19 production facilities, 8,000 employees and 700 sales people worldwide. They produce over 30 brands, including Schlage and Von Duprin, for hospitals, government, industry and residences.
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Mechanical locks and key systems are the core business. “We have over 38 million applications of just the Schlage master key system,” said Petratis. “In the mechanical world, managing that hierarchy of keys is a key deliverable of our business.”
Allegion has “tremendous cash flow capability and profitability,” said Petratis, noting that six competitors who have controlled the sector’s consolidation represent just 40% of the overall market. Allegion has done three deals since spinning off from Ingersoll Rand last December, and the company is open for more, Petratis said.
Key strategies for the company include expanding in its core markets, innovating in its existing and new product categories, and growing in emerging markets. One of the largest markets for Allegion is North America, where residential and commercial construction provide a strong base, Petratis said.
Petratis added that Allegion is also “well-positioned around the globe,” and predicted the Asian market will double over the next five years. Allegion does 62% of its business in the U.S. and 17% in Western Europe.
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