International Segment's Sustained Double-Digit Profit Growth and Expansion Efforts
International segment posted 3.6% top-line growth on a reported basis and 8.3% excluding divestiture of Mexico.
International adjusted operating income increased 20.1%, marking the seventh consecutive quarter of double-digit profit growth.
Growth driven by local case growth of 4%, expansion of sales resources in key metros like Toronto, Dublin, and London, and supply chain capacity expansion, including a new facility outside London opening later this year.
Management remains bullish on international prospects, citing margin improvements from strategic sourcing and efficiency gains from enterprise technology.
Adjusted earnings per share rose 4.1% to $2.04, driven by operational performance and accretive capital deployment but partially offset by higher tax.
Adjusted operating margin was 23.7%, flat year-over-year, with segment margin expansion offset by increased corporate expenses.
Allegion reported Q2 2025 revenue exceeding $1 billion, a 5.8% increase compared to 2024, with organic revenue growth of 3.2%.
Americas segment revenue grew 6.6% reported and 4.5% organic, with nonresidential business growing high single digits organically and residential declining mid-single digits.
International segment revenue increased 2.9% reported but declined 2.2% organically, with electronic businesses growing but mechanical portfolio pressured.
Net debt to adjusted EBITDA ratio remained healthy at 1.5x.
Year-to-date available cash flow was $275.4 million, up 56.5%, supported by higher earnings, lower capital expenditures, and improved working capital.
Adjusted operating earnings were $0.37 per share, and free cash flow was negative $2 million, reflecting lower EBITDA and higher capital spending compared to the prior year.
Foreign exchange headwinds negatively impacted results by $13 million.
Operational improvements and cost savings totaled $23 million, including $18 million from better performance in North America and Europe and $18 million from green energy credits and lower overhead.
Price and mix contributed a favorable $12 million, while volume decreased by $9 million, mainly due to operational challenges and lower production at IP's Riverdale mill.
Sylvamo reported adjusted EBITDA of $82 million for Q2 2025, with a margin of 10%, in line with expectations despite the largest planned maintenance outages in over five years costing nearly $70 million.
The international segment saw a 58% increase in revenue to $28.4 million, driven by demand normalization after the U.K. recessionary impact in late 2023 and 2024.
Margins in the international business are improving as volumes return, indicating a positive trend in global markets.
Management expressed satisfaction with the demand recovery, highlighting the importance of international growth as a counterbalance to North American softness.
Dafinchi