Slide 1: Q3 2022 Earnings Presentation
Q3 2022 Earnings Presentation November 16, 2022 1
Slide 2: Legal disclaimers
Legal disclaimers Forward-looking statements This document contains, and our officers and representatives may from time to time make, certain “forward-looking statements” within the meaning of the safe harbor provisions of the US Private Securities Litigation Reform Act of 1995. Forward-looking stat
Slide 3: Agenda
Agenda 01 Key topics 02 IFRS results 03 Core results 04 Outlook 3
Slide 4: Key topics
Key topics Alcon
Slide 5: Q3 2022 | Highlights
Q3 2022 | Highlights • 3Q22 sales of $2.1 billion, up 2%, or 9% constant 1 currency driven by continued international recovery and product innovation • ~700 basis points of negative impact from foreign currency on sales growth • Announced intended acquisition of Aerie Pharmaceuticals, Inc. • Continu
Slide 6: Q3 2022 | Select financial highlights
Q3 2022 | Select financial highlights rd 1 1 1 3 party sales Core operating margin Core diluted EPS Free cash flow 3Q22 $2,124M 3Q22 17.2% 3Q22 $0.50 9M22 $475M 3Q21 $2,084M 3Q21 17.7% 3Q21 $0.54 9M21 $578M 1 Core operating margin of 17.2%, 3Q22 core diluted EPS of $0.50, 9M22 cash from operations S
Slide 7: Ocular health | Expanding our footprint
Ocular health | Expanding our footprint • Announced expected acquisition of Aerie Pharmaceuticals, Inc.; closing expected 4Q22, to be funded with new debt • US sales force dedicated to delivering eye drops in the ophthalmic channel ◦ Currently selling Systane, Pataday, Simbrinza, Eysuvis and Invelty
Slide 8: Transformation update | Additional transformation initiatives
Transformation update | Additional transformation initiatives to further streamline the organization Original transformation program published in 3Q19 earnings presentation • $200M - $225M annual run-rate savings • $300M total cost • Time period: multi-year, ending around year-end 2023 Additional tr
Slide 9: IFRS results
IFRS results Alcon
Slide 10: Q3 2022 | IFRS results
Q3 2022 | IFRS results Worldwide net sales Operating margin Diluted EPS $0.23 9.7% $2.1B $2.1B 1.0% $0.00 3Q21 3Q22 3Q21 3Q22 3Q21 3Q22 +2% +8.7 percentage points +$0.23 10
Slide 11: 9M 2022 | IFRS results
9M 2022 | IFRS results Worldwide net sales Operating margin Diluted EPS $0.87 $6.5B 10.0% $6.1B 6.5% $0.48 9M21 9M22 9M21 9M22 9M21 9M22 +7% +3.5 percentage points +$0.39 11
Slide 12: Q3 2022 | IFRS operating margin bridge
Q3 2022 | IFRS operating margin bridge 3Q22 vs. 3Q21, % of net sales 1.9 12.3 8.1 9.7 (2.6) 2.0 1.0 (0.7) 1 3Q21 Gross Margin SG&A R&D Other income/ Foreign 3Q22 expense Exchange 1. R&D expense in 3Q21 included a $178 million impairment of an intangible asset. 12
Slide 13: 9M 2022 | IFRS operating margin bridge
9M 2022 | IFRS operating margin bridge 9M22 vs. 9M21, % of net sales 0.4 12.1 3.3 10.0 2.1 (2.1) 6.5 (0.2) 1 9M21 Gross Margin SG&A R&D Other income/ Foreign 9M22 expense Exchange 1. R&D expense in 9M21 included a $178 million impairment of an intangible asset. 13
Slide 14: Core results
Core results Alcon
Slide 15: Q3 2022 | Core results
1 Q3 2022 | Core results Worldwide net sales Core operating margin Core diluted EPS 17.7% $0.54 $2.1B $2.1B 17.2% $0.50 3Q21 3Q22 3Q21 3Q22 3Q21 3Q22 +9% cc -0.5 percentage points -$0.04 +1.6 percentage points cc +14% cc ~210 bps negative FX impact ~$0.12 negative FX impact 1. Core operating margin,
Slide 16: 9M 2022 | Core results
1 9M 2022 | Core results Worldwide net sales Core operating margin Core diluted EPS 18.7% $1.82 18.0% $6.5B $1.60 $6.1B 9M21 9M22 9M21 9M22 9M21 9M22 +12% cc +0.7 percentage points +$0.22 +2.4 percentage points cc +32% cc ~170 bps negative FX impact ~$0.30 negative FX impact 1. Core operating margin
Slide 17: 9M 2022 | Product mix
1 9M 2022 | Product mix Vision Care $2.7B (42%) Surgical $3.8B (58%) Ocular health (39%) Implantables (34%) Dry eye products Monofocal IOLs Allergy eye drops Advanced technology IOLs Steroid eye drops Glaucoma implants Glaucoma eye drops $6.5 billion Contact lens care Consumables (49%) Dedicated con
Slide 18: Q3 2022 | Surgical growth driven by international markets
Q3 2022 | Surgical growth driven by Net Sales 1 (USD) (CC) improvements across international (USD $M) markets $1,161 $1,216 5% 12% $392 5% 11% $375 • Continued recovery in international markets + • Maintained PCIOL market leadership, continuing demand for Vivity • Sales of Hydrus Microstent followin
Slide 19: Q3 2022 | Vision Care benefited from SiHy contact lenses and Systane
Q3 2022 | Vision Care benefited from SiHy Net Sales contact lenses and Systane, significantly (USD $M) (USD) (CC)1 offset by supply chain challenges in $923 $908 (2%) 5% contact lens care (1%) 7% + • Growth in silicone hydrogel contact lenses, including the Precision1 and Total family of lenses: Dai
Slide 20: Q3 2022 | Core operating margin bridge
1 Q3 2022 | Core operating margin bridge 3Q22 vs. 3Q21, % of net sales 0.6 19.3 1.8 (0.2) 17.7 17.2 (0.6) (2.1) 3Q21 Gross Margin SG&A R&D Other income/ Foreign 3Q22 expense Exchange Key drivers • Improved operating leverage driven by higher sales and favorability from incentive compensation, partia
Slide 21: 9M 2022 | Core operating margin bridge
1 9M 2022 | Core operating margin bridge 9M22 vs. 9M21, % of net sales 0.8 20.4 1.9 (0.1) 18.7 18.0 (1.7) (0.2) 9M21 Gross Margin SG&A R&D Other income/ Foreign 9M22 expense Exchange Key drivers • Improved operating leverage driven by higher sales and favorability from incentive compensation, partia
Slide 22: 9M 2022 | Cash flow & balance sheet highlights
9M 2022 | Cash flow & balance sheet highlights Cash and cash equivalents $1.2 billion 9M22 cash flows from operations $872 million 1 9M22 free cash flow $475 million Capex $397 million Investing in new contact lens manufacturing capacity Debt $3.9 billion No financial covenants Financing related to
Slide 23: Outlook
Outlook Alcon
Slide 24: FY 2022 | Outlook
FY 2022 | Outlook 2022 outlook as of February as of May as of August as of November Comments vs. August Net sales (USD) $8.7B to $8.9B $8.7B to $8.9B $8.6B to $8.8B $8.5B to $8.7B Decrease 1 CC net sales growth vs. 2021 +7% to +9% +9% to +11% +9% to +11% +10% to +11% Tightening of range 1 Core opera
Slide 25: Appendix
Appendix 25 ‹#›
Slide 26: Appendix: Non-IFRS measures as defined by the Company
Appendix: Non-IFRS measures as defined by the Company Alcon uses certain non-IFRS metrics when measuring performance, including when measuring current period results against prior periods, including core results, percentage changes measured in constant currencies and free cash flow. Because of their
Slide 27: Reconciliation of IFRS results to core results
Reconciliation of IFRS results to core results Three months ended September 30, 2022 Amortization of IFRS certain intangible Transformation Other Core (1) (4) (6) ($ millions except earnings per share) results assets costs items results Gross profit 1,166 142 — 2 1,310 Selling, general & administrat
Slide 28: Reconciliation of IFRS results to core results
Reconciliation of IFRS results to core results Three months ended September 30, 2021 Amortization of IFRS certain intangible Separation Transformation Legal Other Core (1) (2) (3) (4) (5) (6) ($ millions except earnings per share) results assets Impairments costs costs items items results Gross prof
Slide 29: Reconciliation of IFRS results to core results
Reconciliation of IFRS results to core results Nine months ended September 30, 2022 Amortization of certain intangible Transformation Legal Core (1) (2) (4) (5) (6) ($ millions except earnings per share) IFRS results assets Impairments costs items Other items results Gross profit 3,578 423 59 — — (1
Slide 30: Reconciliation of IFRS results to core results
Reconciliation of IFRS results to core results Nine months ended September 30, 2021 Amortization of certain IFRS intangible Separation Transformation Legal Other Core (1) (2) (3) (4) (5) (6) ($ millions except earnings per share) results assets Impairments costs costs items items results Gross profi
Slide 31: Reconciliation of IFRS results to core results
Reconciliation of IFRS results to core results Explanatory footnotes to IFRS to core reconciliation tables (1) Includes recurring amortization for all intangible assets other than software. (2) Includes impairment charges related to intangible assets. (3) Separation costs, primarily related to IT an
Slide 32: Reconciliation of free cash flow
Reconciliation of free cash flow The following is a summary of free cash flow for the nine months ended September 30, 2022 and 2021, together with a reconciliation to net cash flows from operating activities, the most directly comparable IFRS measure: ($ millions) 2022 2021 Net cash flows from opera
Slide 33: Alcon
Alcon SEE BRILLIANTLY