Good morning, and welcome to the Allegion Q3 2022 Earnings Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note this event is being recorded. I would like to turn the conference over to Tom Martineau, Vice President of Investor Relations and Treasurer. Please go ahead.
Thank you, Francesca. Good morning, everyone. Thank you for joining us for Allegion's Q3 2022 earnings call. With me today are John H. Stone, President and Chief Executive Officer, and Mike Wagnes, Senior Vice President and Chief Financial Officer of Allegion. Our earnings release, which was issued earlier this morning, and the presentation, which we will refer to in today's call, are available on our website at investor.allegion.com. This call will be recorded and archived on our website. Please go to slides two and three. Statements made in today's call that are not historical facts are considered forward-looking statements and are made pursuant to the safe harbor provisions of federal securities law. Please see our most recent SEC filings for a description of some of the factors that may cause actual results to differ materially from our projections. The company assumes no obligation to update these forward-looking statements.
Today's presentation and commentary include non-GAAP financial measures. Please refer to the reconciliation in the financial tables of our press release for further details. John and Mike will now discuss our Q3 2022 results, which will be followed by a Q&A session. Please, for the Q&A, we would like to ask each caller to limit themselves to one question and one short follow-up, and then reenter the queue. We would like to give everyone an opportunity given the time allotted. Please go to slide four, and I'll turn the call over to John.
Thanks, Tom. Good morning, and thank you all for joining us today. Allegion delivered a very strong Q3, and as we look at the market dynamics, we continue to see strength in the Americas non-residential sector. Leading indicators for that business, like the ABI and AIA consensus, are positive and continue to be in expansionary territory, particularly for institutional verticals. On the Americas residential side, our business grew nicely in the quarter, but we are seeing signs of a slowing market. Certainly, new construction is impacted by rising mortgage rates, and retail point of sale for our industry is returning to more normal levels. Although Allegion International is experiencing broader weakness in many of its markets, we continue to see strength and demand for our electronics and software solutions. Allegion delivered record revenue during the Q3.
This is due to the hard work and dedication of our team as we've made significant progress on product redesign and other supply chain improvements that are driving strong operational performance across the company. Top-line revenue was also aided by robust price realization in the quarter across the world. I do wanna highlight that while we've made some progress, there's still choppiness in the electronic supply chain. Backlogs in electronics are still elevated as demand for those products has remained strong. At the beginning of the year, we underscored our commitment to aggressively pursue price across all products and in all channels. The result of this effort is evident in the quarterly results. While we continue to experience inflationary headwinds, our price, productivity, and inflation dynamic was positive this quarter, both on a dollar and margin basis. Allegion will continue to assess the need for future price increases.
Lastly, the currency pressures impacting our international businesses persist. The reported revenues in the Q3 reflect $26 million of pressure related to foreign exchange rates. Please go to slide five. At the beginning of the quarter, on July fifth in fact, we officially welcomed the Access Technologies business into the Allegion family. Together, we will deliver long-term value for customers, shareholders, and employees alike, and we're already moving in that direction. The operational performance of the business was in line with the expectations shared with you in last quarter's earnings call, and our teams are getting well-aligned on culture, vision, and strategy. Just as important, our early work together affirms that Access Technologies and Allegion are a great combination. We have unique opportunities to accelerate our seamless access strategy with innovation that will create new value around doors and entrances.
This is where I get to say a picture says a thousand words, and we now have a well-established recurring service business that positions us to meet new customer needs as devices become more connected and technology advances. We have an expanded portfolio of products that fills gaps, complements our business, and takes full advantage of our demand generation specification engine in the Americas. Bottom line, Access Technologies is a strong business. It's another category market leader for Allegion. We're off to a great start and excited about the opportunities ahead. Now let's turn to slide 6 and take a look at the quarter performance for more details. Revenue for the Q3 was $914 million, an increase of 27.4% compared to last year.
Organic revenue growth was 18.6%, attributed to both significant price realization worldwide and strong volume growth in the Americas. The Access Technologies acquisition contributed approximately 12% to the total growth number, and currency impacts remain a significant headwind. Mike will share more details on the segment reporting in a moment. Adjusted operating margin and adjusted EBITDA margins increased by 100 basis points each in the Q3. The increase was driven by volume leverage in the Americas, as well as price and productivity exceeding inflation. These more than offset the margin dilution related to Access Technologies. Excluding the Access Technologies business, adjusted operating income margins were up 240 basis points. Adjusted EPS of $1.64 increased 8 cents, or approximately 5% versus the prior year.
Robust operational performance more than offset the unfavorable tax rate impact, which is compared against a prior year that had substantial non-recurring benefits. Mike will now walk you through the financials, and I'll be back later to discuss our 2022 outlook.
Thanks, John, and good morning, everyone. Thank you for joining today's call. Please go to slide 7. This slide reflects our earnings per share reconciliation for the Q3. For the Q3 of 2021, reported earnings per share was $1.59, and adjusted earnings per share was $1.56. Operational results were very strong in the quarter, adding $0.49 per share, reflecting 31.4% growth. This was driven by strong pricing, volume, and operational execution, which more than offset significant inflationary and currency pressures. Access Technologies delivered $0.06 to earnings per share as operational results of $0.10 per share offset $0.04 of intangible amortization. The operational results were as expected and amortization was favorable. A year-over-year tax rate reduced earnings by $0.28 per share. This decline was driven by tax benefits in 2021 that were non-recurring.
As anticipated, interest expense was a 12-cent per share drag on earnings, primarily driven by increased debt to finance the acquisition of Access Technologies. Other income was an 8-cent per share reduction, as the prior year had some favorable items that did not repeat in 2022. Favorable share count offset the impact of investment spending in the quarter. This results in adjusted Q3 2022 earnings per share of $1.64, an increase of 8 cents or 5.1% compared to the prior year. Lastly, we have a 34-cent per share reduction from adjusted EPS to arrive at reported EPS. This reduction is attributable to M&A and additional non-purchase accounting items related to Access Technologies, along with the loss on the divestiture of our Milre business in South Korea.
After giving effect to these items, you arrive at Q3 2022 reported earnings per share of $1.30. Please go to slide 8. This slide depicts the components of our revenue performance for the quarter. I'll focus on total Allegion results and cover the regions on their respective slides. As indicated, we experienced a robust 18.6% organic revenue growth in the Q3, driven by both price and volume. Strength in Allegion Americas, both non-residential and residential, led to volume growth. Net acquisition and divestitures delivered 12.4% growth, driven by Access Technologies. Currency pressures continue to be a significant headwind, primarily impacting our international segment, bringing the total reported growth to 27.4% in the quarter. Please go to slide 9.
Q3 revenues for the Americas segment was $747.2 million, up 42.5% on a reported basis and up 25.8% organically. The segment delivered significant price realization in both our non-residential and residential businesses as we remain committed to addressing inflation. Aided by substantial price and strong volume, non-residential grew approximately 30% in the quarter. Residential was up mid-teens, also driven by both price and volume. A portion of our growth was fueled by backlog reductions as the actions our team undertook helped us improve component availability and shipments in the quarter. Electronics revenue was up approximately 30% and was a significant improvement from the growth rates experienced the past few quarters. This was supported by continued strength in demand and the timing of component availability.
While it's important to note that electronic component supply chains remain choppy, our re-engineering and alternate supply efforts are providing improved flexibility to our supply capabilities. Access Technologies contributed mid-teens to the Americas reported growth numbers. Americas adjusted operating margins and adjusted EBITDA margins for the quarter were up 50 basis points and 80 basis points respectively. This includes Access Technologies, which we previously stated would be dilutive to margins. Excluding Access Technologies, the business drove a 300 basis point improvement in operating margins versus the prior year. Volume leverage contributed to the margin increase and for the quarter. Price productivity inflation dynamic was positive both on dollars and margins. Please go to slide number 10.
Q3 revenue for our Allegion International segment was $166.5 million, down 13.6% on a reported basis and down 0.8% organically. In the quarter, strong price realization mostly offset lower volumes. Lower volumes are attributable to end market softening. However, demand for our electronics and software solutions remains stable. Currency headwinds persisted this quarter and reduced reported revenue by 12.8%. Q3 international adjusted operating margins decreased 180 basis points compared to last year, and adjusted EBITDA margins were down 160 basis points. The margin decline was driven by reduced volume and FX pressures, which more than offset favorable impacts of the combination of price, productivity, and inflation. Please go to slide 11.
Year-to-date available cash flow is $225.6 million, which is a decrease of more than $102 million compared to the prior year period. This year's available cash flow continues to be in line with pre-pandemic levels. We continue to operate with a strong debt structure, with 80% of our debt having fixed interest rates. We currently have $199 million outstanding on our revolving borrowings. During the Q3, we repaid approximately $140 million from the initial draw used to help fund the acquisition of Access Technologies. We have a strong leverage profile with our net debt to EBITDA ratio at 2.9x at the end of the quarter. We still plan to use the excess cash generated during the remainder of the year to pay down the revolver.
This would be after paying expected dividends, which are subject to board approval and other debt payments. The 2022 full year available cash flow outlook is unchanged from our prior outlook, remaining at a range of $420 to 440 million. I will now hand it back to John for an update on our full year 2022 outlook.
Thanks, Mike. Please go to slide 12. Looking at our full year 2022 outlook, to reiterate a few things said earlier in the call, we see non-residential market demand in the Americas as remaining strong. Leading indicators remain favorable. Further, while demand for electronics products remains strong, residential markets in the Americas are indeed softening. As you've heard, the Allegion team has made significant progress on supply chain challenges. Our electronics growth was strong this quarter, and we continue to navigate the choppiness of component supply. Long term, we expect electronics adoption to remain a growth driver for Allegion.
Given this backdrop, we're raising the outlook for Americas and are now projecting total growth to be between 22.5% and 23.5%, with organic revenue to be up 13.5% to 14.5% for the year. Allegion International experienced another quarter of solid price realization and stable demand for our electronics and software solutions. However, we see the broader markets continue to soften, driven by macroeconomic and geopolitical factors, and currency pressures are anticipated to remain. For the Allegion International segment, we're revising our outlook for total revenue to be down 10.5% to 11.5%, with approximately flat organic growth. All in, for total Allegion, we expect revenue growth to be in the 13%-14% range, with organic revenues increasing 9.5% to 10.5%.
Please go to slide 13. We're expecting reported EPS to come in at a range of $4.90 to 5.00 per share and adjusted EPS to be between $5.40 to 5.50. The adjusted EPS increase from the prior outlook is driven by lower Access Technologies and intangible amortization. The revised amortization takes the outlook for the acquisition impact to -$0.055 per share versus -$0.10 per share we communicated last quarter. Our updated outlook assumes incremental investments of approximately $0.17 per share. As a reminder, the incremental investment spend is predominantly related to R&D and technology investments to further accelerate our growth and support our seamless access strategy.
The $0.20 per share increase in reported to non-GAAP adjustments from the previous outlook is driven by the loss on the Milre divestiture and non-cash purchase accounting adjustments, which were primarily recorded in this quarter. Please go to slide 14, and let's wrap this up. Here's the main themes I hope you heard today. Allegion had a very strong Q3. Our operational performance was exceptional. The entire Allegion team deserves a lot of credit for this. The Access Technologies acquisition is off to a great start and performing as expected. We're excited to have this business and the people as a part of the Allegion family and to have automated entrance solutions in our portfolio. We've made significant progress on supply chain challenges, although choppiness in electronics components persist.
America's non-residential demand is still strong, leading indicators are still positive, and we continue to see strength and demand for our global electronics products. To reiterate, we see electronics adoption as a long-term growth driver for Allegion. I'm very proud of the dedication and resiliency of our entire team and the results we've delivered this quarter. With that, Mike and I would be happy to take your questions.
We will now begin the question-and-answer session. To ask a question, you may press star then one on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. We kindly ask participants to limit to one question and one follow-up question. The first question comes from Josh Pokrzywinski with Morgan Stanley. Please go ahead.
Hey, good morning, guys.
Good morning.
John, good to hear you on the call. Just wanted to dig in a little bit on this, you know, kind of non-resi backlog phenomenon. You know, it's not really a metric you guys talk about as much, but, you know, with the growth in the quarter, clearly, you know, supply chain improving, everybody gets some product out the door. Can you maybe contextualize, you know, how much of the excess backlog you worked off and, you know, how should we think about, you know, maybe kind of a normalized margin? 'Cause, you know, I would imagine the mix on that influences things a lot, you know, once we get past that, you know, that backlog period.
Yeah, Josh, as you know, we had built backlogs starting the end of last year, and most of that driven by some supply chain as well as really strong demand. As you look at the Q3, we have better component availability, as we talked about on the call. That helped drive more revenue in Americas non-res at 30%. Not all of that obviously is demand. We did reduce backlog levels. We don't disclose the exact amounts, but we did have a very strong volume growth, which we provided, and that's driven by both demand being strong as well as backlog reductions. With respect to margins, the key thing about margins for us is we're driving that price realization to offset the inflationary pressures that we've been seeing. This quarter, we finally turned the corner on the margin percent.
Last quarter, it was offsetting on dollars. We've made significant progress here as we progressed over the last few quarters on that element. It's those key items I think that have led to the margin expansion you saw.
Josh, this is John. I would just add one thing that probably every manufacturer has dealt with. You know, when we talk about choppiness in the supply chain, without a doubt, that injects this or the other inefficiency into the factory. So that's. There's been some cost inefficiencies over time that we've been working through, and certainly that's on the way towards improvement as well. Just one other nuance there to your question. That's a good one. Thank you.
Got it. Thanks. Just quick follow-up on the pricing dynamic. I know you guys in the industry in general honors existing quotes out there, so price kind of layers in over time. What inning are we in terms of being caught up on price versus having these outstanding older price quotes?
Yeah, we've been raising price pretty consistently over the last year as we've had such challenges in the inflationary environment. I would say the dynamic of price productivity and inflation will be positive moving forward. I wouldn't expect a situation where we turn the other way. We've kept the dynamic positive and expect it to be positive moving forward.
Perfect. Appreciate the color. Thanks, guys. Best of luck.
The next question is from Julian Mitchell with Barclays. Please go ahead.
Hi, this is Kieran Patel, covering on for Julian Mitchell. I just wanted to ask on residential. It looks like residential growth in the Americas inflected positively, and I just wanted to, you know, get a sense of is this more of, you know, a function of supply chains easing versus underlying demand, and to what extent do you see this growth as sustainable, going forward, given what we're seeing in the housing market?
Thanks for the question. This is John. I would say, you know, going back to our comments, certainly the Americas residential market is softening. We're reading the same headlines that you are. Higher mortgage rates is certainly going to have an impact there. I would say, you know, our performance in the quarter is without a doubt due to strong demand for our products. We have good products. People like them. We get good reviews. Our electronics growth you saw was very strong, which is quite prevalent in the residential sector. You know, yeah, the broader market is softening without a doubt. I think electronics remains a tailwind for us. Yeah, so what more to say there? I think that's it.
Yeah, broader market softening a little bit. Electronics is favorable. That's a tailwind. Yeah, so we're still chugging along.
That's helpful, thanks. My follow-up is, you know, just kind of, you know, what you're seeing in the channel. You know, based on your results today, it doesn't seem as if you're seeing any signs of destocking, you know, which we're seeing in some other industrial markets. Can you give us some color on what you're seeing in the channel from an inventories perspective and what underlying demand is looking like relative to that? Thanks.
Yeah. Yeah, you bet. Very relevant question. Thanks for that. I'd say we'd liken it to more normal levels. I wouldn't necessarily say destocking, restocking, just more normal point of sale pull-through based on retail demand. You know, I think that's the environment we're getting back to as lead times normalize to more of what the industry is used to. Retail demand pull-through is what's gonna drive the stocking levels.
Appreciate it. Thank you.
The next question is from Ryan Merkel with William Blair. Please go ahead.
Hey, good morning, and thanks for taking the questions. My first question is on Q4. It looks like guidance implies a little bit of a cut there. Can you unpack any changes you made versus prior expectations?
Yeah. You know, Ryan, if you look at Allegion, we always guide for the full year. In July, we put a guide out there, and essentially, we reiterated the guide this quarter, for the full year because we're a full year guiding company. With respect to Q4, you can back into some math, see strength in the Americas, right? Americas top line guide implied in the high teens. We are seeing obviously some weakness in that guide internationally, right, which we called out. Overall, our business is seeing strength in Americas, led by obviously non-res, which we talked about, and seeing some softening internationally. Full year in line with what we said July. I don't think there's major changes from what we told you previously, but you do have some mix between the two, the two regions.
Got it. That's helpful. For my follow-up, you mentioned progress on supply chain, but still some choppiness. Where are there still issues, and when do you expect to fully catch up?
Yes, that's the question of the year, I think on fully catch up. I would think of it like this. You know, if three or four quarters ago, we had like 50 suppliers on the severely delinquent list, today that would be 7 or 8. Just to kinda quantify it for you. I think the choppiness still exists primarily in semiconductors, microprocessors. Now, the redesign work that Allegion did is obviously having benefits. We're seeing strong electronics growth. Some of those suppliers are performing quite well. Some are still having a lot of issues. You know, it comes up both in terms of quantity that we need to fully meet retail demand, but then also linearity that we need to really have a productive manufacturing operation.
That's kind of if we double-click into what we mean by choppiness. I'd say this is definitely continuing on into 2023. But we're making progress, and we feel good about the progress we've made. We feel good about the improving flexibility and resiliency of our supply base, and I think, you know, the improvement trend will continue.
Thank you.
Next question comes from Brett Linzey with Mizuho Americas. Please go ahead.
Hi. Good morning, all.
Morning.
Morning.
Yeah, congrats on a great quarter. Just back to the price and productivity and specifically within the Americas business, you know, did step up nicely from $6 million in Q2 to $24 million here and then Q3. Should we see that continue to move higher into Q4? Given the wraparound price, you should be able to, you know, get next year. I mean, should we think of, you know, $25 million in Q1 and Q2 of next year at a minimum?
Yeah, Brett, you know, with respect to next year, we'll give an outlook when we come back in February. I'm certainly not on the Q3 call gonna get that specific of price productivity inflation. However, in general, think of this dynamic as progressively improving to this point, right? We were weaker last year, negative, got back to positive this quarter on a substantial way. Obviously, volume drives more ability to get that price because you have more revenue. In general, we're gonna fight that inflation and have that dynamic positive moving forward.
Got it. Just back to the backlog question. You're obviously working here to, you know, uncork that specifically on the electronic side. As these supplier additions are ramping here, should we think of the electronics growth, you know, normalizing back to that double digit plus level that Allegion has really observed pretty consistently for several years before the pandemic? Going forward, kinda double digit in that territory?
Yeah, especially long term, this is a great growth driver for us, and that should be a double-digit growth business for us as you think about the long term. We talked about choppiness, right? Long term, this is a double-digit growth opportunity for us.
Just a quick follow-up. I mean, do you think you have enough availability to kind of, you know, sustain that into Q4 here?
Yeah, I'm not gonna guide a specific quarter, but as you looked at our results for the Americas in particular, we have a pretty healthy top-line guide in Q4. You can draw your conclusions to that particular item, but we still see strength in Q4 as indicated in our guide.
Appreciate the color.
Thank you.
The next question is from Joseph O'Dea with Wells Fargo. Please go ahead.
Hi. Good morning. I wanted to start on the operational and FX piece of the guide, and if you could just sort of bridge from prior guide to revised guide. I mean, the numbers didn't change, but what some of the moving parts are and given the strength we saw in the Q3, would have expected to see that could have moved up. But if you could just talk kind of the Americas piece, the international piece, the FX piece in terms of what moved from last guide to this one.
Yeah. Joe, if you think about FX, we actually took down our guidance in July when we reported our Q2 results for currency. A good chunk of the currency pressure you've seen with the dollar strengthening, we anticipated and put in that guidance that we put out in July. Currency rates have gotten a little worse since that period of time, but a good chunk of the FX pressure we called out previously. With respect to operations, you know, we're right in line with what we said in July for the year. Obviously, like I mentioned earlier, a little more strength in Americas as we took up the revenue outlook there, and a little more pressure from markets internationally.
Okay. Then I wanted to ask on the Americas margin, excluding Access Technologies, clearly some nice progress that we saw sequentially. When we go back to, you know, where kind of pre-pandemic margins were, you know, there still, you know, appears to be some good opportunity there. You know, again, kind of bridging to that, I mean, what are the keys to sort of get back to those kinds of margins? I mean, pretty good volume this quarter. I'm not sure sort of mix side of things, if still from a price productivity inflation, you know, there's room to go and you have visibility into that. It's kind of a timeline to getting back to, you know, where your margins were.
Yeah. If you think about the margin profile in Americas, the strong contribution margin those businesses have as we grow, we should get margin expansion. We've done a much better job this year driving the price realization to offset the inflation. We've been talking about this all year on these calls. We expect that to continue. We think that there's margin runway for the Americas, and we'll continue to drive that pricing to offset inflation with an understanding that this has been the most significant inflationary environment I've ever personally experienced. You know, we're gonna have to just combat that with the pricing actions.
Joe, this is John. I'd add that again, there's an electronics angle to this as well, you know, electrified and connected products are delivering a substantially higher value to the end customer, which then should also be, you know, not just organic growth on the top line, but also a margin expansion opportunity too, as electronics adoption continues. That, yeah, that's an element as well that we're really keen to continue to grow, and deliver more value to the customer.
Just related to that, do you think you're capturing that value proposition today, or do you think there are opportunities to sort of better capture that margin opportunity on the electronic side?
I think both. I think we're doing very well today, and I think there's continued opportunity. That's a tailwind for Allegion.
Got it. Thank you.
The next question is from David MacGregor with Longbow Research. Please go ahead.
Hey, good morning. This is Joseph Nolan on for David MacGregor.
Hi, Joe.
First, I just wanted to ask, within the Americas group, can you talk about volume versus price trends for both, the non-res and residential businesses?
Yeah. Historically, we don't disclose those individual components. What we did share for the quarter was they were both up, pricing and volume for each segment. The individual numbers, historically we have not and don't anticipate disclosing that level of detail.
Okay. Got it. Just on the Access Technologies business, I realize it's still early from an integration standpoint, but can you just give any update about how that's going in terms of the integration?
Yeah, I appreciate that question. I think as we said in the prepared comments, off to a great start. Our teams are gelling very well. There's this or the other, you know, small project win here and there. I think the early work on some of the heavy lift in terms of systems and things like this will continue for, you know, the next many months, but off to a very good start. Cultural fit is very good, strategic fit is very good. The automatic doors is an excellent complementary portfolio to the rest of Allegion. Just really excited for that team and really excited for the services business that comes along with that.
We're quite bullish on the future there.
All right, great. Thanks for answering my questions.
Next question is from Brian Ruttenbur with Imperial Capital. Please go ahead.
Yes, thank you very much for taking my questions. Can we talk a little bit about the competitive landscape right now, what you're seeing, given the ASSA ABLOY, HHI Spectrum transaction appears to be at least held up some with the DOJ, excuse me. Can you talk about the opportunity that you see out there, with Allegion in the competitive environment? Are you gaining market share, losing market share, because of this transaction, or it doesn't impact you at all?
Yeah, it's certainly not appropriate for us to comment on that particular situation. I would say we feel good about our product portfolio, about our brands, about our competitive position in the market. I think our Q3 results reflect that as we made the supply chain improvements we've continued to talk about, we generate good results. You know, we've been saying for several quarters now, we were supply constrained versus demand constrained. I think that continued to prove itself out. Yeah, we'll continue to compete vigorously in the segments where we compete. I think Allegion's best days are still ahead.
Okay. As a follow-up, I'll go in a different direction. Can we talk about you addressed a little bit that price increases going forward. Are you starting to see a pushback on the non-residential market yet in the Americas on price increases? That kinda tells you when you're done. I just wanted to get kinda an indication from you what you see in terms of price increases going forward, if you feel like you can push more through or you feel like that you're at the top end of that market.
Yeah, we've put a number of increases in. I would say it all depends on what the future inflationary environment is. As we sit here today, we would always communicate future price increases to the channel before an earnings call. Expect us to pass along pricing if inflation persists to mitigate that, but it all depends on the inflationary environment moving forward.
Great. Thank you.
This concludes our Q&A session. I would like to turn the conference back over to John H. Stone for any closing remarks.
Yep, thanks very much, and thanks everyone for attending today. I would just like to again reiterate, we feel like we delivered an outstanding performance this quarter. The entire Allegion team and our distribution partners deserve credit for that. Access Technologies, awesome acquisition, off to a great start. We are making the supply chain improvements that we've been promising for a while, and you see that reflected in our results. We see continued strength in the Americas non-residential end markets and global electronics demand. Allegion's best days are still ahead. Thanks very much.
The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.