Slide 1: Alcon, Inc. Worldwide Leader in Ophthalmic Research and Manufacturing
Alcon, Inc. \X/orldwide Leader y in Ophthalmic Beseayen and Manufacturing
Slide 2: Annual General Meeting May 3, 2005
Alcon, Inc. Annual General Meeting May 3, 2005 Jacqualyn Fouse Senior Vice President, Finance and CFO 2
Slide 3: Safe Harbor Statement
Safe Harbor Statement Statements contained in this presentation that are forward-looking are based on current expectations that are subject to a number of uncertainties and risks, and actual results may differ materially. This presentation is being made on May 3, 2005, and Alcon does not undertake a
Slide 4: 2004 Financial Results
Alcon, Inc. 2004 Financial Results 4
Slide 5: 2004 Earnings Highlights
2004 Earnings Highlights • Sales increased 14.9% to $3.9 billion • Operating income up 28.7% • Net Interest Expense down 84.5% • Effective Income Tax Rate down to 22.6% from 30.6% (2004 includes the impact of tax settlements and tax credits of $57.6 million recorded in Q2 2004, rate would have been
Slide 6: Other 2004 Financial Highlights
Other 2004 Financial Highlights • Reduced debt and moved from a net debt* position of $324.3 million to a net cash* position of $105.4 million • Purchased 3.6 million shares of treasury stock for $236.3 million • Trade receivables increased 11.9% to $696.8 million (5.9% excluding the effect of excha
Slide 7: 2004 Sales Growth
2004 Sales Growth Millions 4,500 4,000 14.9% 3,500 $3,913.6 3,000 $3,406.9 2,500 2,000 1,500 1,000 500 0 2003 2004 7
Slide 8: Drivers of Sales Growth
Drivers of Sales Growth Sales 2004 : $3,913.6 Million 14.9% 10.9% Real Internal Growth Price Increases 0.2% 3.8% Exchange Impact Sales growth at comparable structure and constant exchange rates (Organic Growth): + 11.1% 8
Slide 9: Geographic Sales
Geographic Sales 2003 Sales 2004 Sales 52.4% 50.9% United States United States 47.6% 49.1% International International 2004 Growth United States + 11.4% International + 18.6% 9
Slide 10: 2004 Sales Performance
2004 Sales Performance Reported = +14.9% 2004 Growth % Constant Currency = +11.1% Constant Percent of Total Sales Reported Currency* 47% 46% Surgical + 14.4% + 9.7% 38% 40% Pharmaceutical + 17.8% + 14.9% 15% 14% + 8.9% Consumer + 5.6% 2003 2004 * Constant Currency growth is a non-GAAP measure and ex
Slide 11: Pharmaceutical Sales
Pharmaceutical Sales Millions 1,800 1,600 2003 2004 Growth 1,400 ($ in Millions) $1,542.6 Infection/inflammation 517.9 572.7 10.6% 1,200 $1,309.9 Glaucoma 432.4 526.3 21.7% 1,000 Allergy 276.6 321.4 16.2% 800 Otic 122.9 171.3 39.4% 600 Other (39.9) (49.1) N/M Total Pharmaceutical 1,309.9 1,542.6 17.
Slide 12: Surgical Sales
Surgical Sales Millions 2,000 1,800 2003 2004 Growth 1,600 $1,814.4 ($ in Millions) 1,400 $1,585.9 Intraocular lenses 498.6 583.9 17.1% 1,200 Cataract/vitreoretinal 1,017.0 1,167.7 14.8% 1,000 Refractive 70.3 62.8 -10.7% 800 Total Surgical 1,585.9 1,814.4 14.4% 600 400 200 0 2003 2004 12
Slide 13: Consumer Eye Care Sales
Consumer Eye Care Sales Millions 600 2003 2004 Growth 500 $556.6 ($ in Millions) $511.1 400 Contact lens disinfectants 282.2 298.9 5.9% Artificial tears 117.3 141.5 20.6% 300 Other 111.6 116.2 4.1% Total Consumer Eye Care 511.1 556.6 8.9% 200 100 0 2003 2004 13
Slide 14: Q1 2005 Financial Summary
Q1 2005 Financial Summary Alcon 1
Slide 15: Q1 2005 Earnings Highlights
Q1 2005 Earnings Highlights • Sales increased 11.1% to $1.1 billion • Operating income up 18.1% • Net Interest Expense down 53.8% • Effective Income Tax Rate down to 24.0% from 31.0% • Net Earnings up 30.6% to $249.5 million • Diluted earnings per share increased 31.1% to $0.80 15
Slide 16: Other Q1 2005 Financial Highlights
Other Q1 2005 Financial Highlights • Net cash* increased from $105.4 million to $244.6 million • Purchased 1.1 million shares of treasury stock for $87.6 million • Trade receivables increased 8.2% to $754.2 million (5.5% excluding the effect of exchange rates**) • Inventories declined 5.4% to $430.5
Slide 17: Q1 2005 Sales Growth
Q1 2005 Sales Growth Millions 1,200 2004 2005 Growth 1,000 $1,070.5 ($ in Millions) $963.6 Glaucoma 127.8 154.3 20.7% 800 Allergy 78.3 86.7 10.7% 600 Otic 34.4 43.0 25.0% Intraocular Lenses 142.0 156.3 10.1% 400 Cataract/vitroretinal 286.1 314.9 10.1% Artificial tears 34.5 43.7 26.7% 200 Other 260.5
Slide 18: Drivers of Sales Growth
Drivers of Sales Growth Sales 2005 : $1,070.5 Million 11.1% 7.8% Real Internal Growth 0.7% Price Increases Exchange Impact 2.6% Sales growth at comparable structure and constant exchange rates (Organic Growth): + 8.5% 18
Slide 19: Revenue History
Revenue History $1,200 Q1 2005 $1,070.5 $1,039.2 $1,000 $963.6 $958.1 $952.7 $925.4 $851.7 $807.1 $822.7 $800 Q1 Q2 Q3 Q4 2003 2004 2005 (dollars in millions) 19
Slide 20: Diluted Earnings Per Share History
Diluted Earnings Per Share History $1.00 Q1 2005 $0.96 * $0.80 $0.80 $0.61 $0.57 $0.62 $0.60 $0.60 $0.49 $0.42 $0.43 $0.40 $0.20 Q1 Q2 Q3 Q4 2003 2004 2005 *Q2 2004 includes the impact of tax settlements and tax credits equaling $0.18 per share. 20
Slide 21: Broad R&D Pipeline
Broad R&D Pipeline • New CLC Disinfectant • ICAPS® Enhanced • AcrySof® Natural • Tear Replacement Toric • New Rewetting Drop • CustomCornea® Hyperopia Consumer • New Irrigating 4 Solution • AcrySof® Phakic Surgical IOL • Patanase® (Patanol 5 • New Vit/Ret Nasal) System • RETAANE® Pharma • Brimonidin
Slide 22: 2005 Outlook
2005 Outlook Alcon
Slide 23: 2005 Full Year Sales Guidance
2005 Full Year Sales Guidance Lower Upper Range Range Sales ($Millions) $4,325 $4,400 Growth % vs. ‘04 10.5% 12.4% • Global growth across major product lines • Share gains from recent product launches • Full year comparisons 2003 introductions • Ciloxan® patent expiration (first half of year) Note:
Slide 24: 2005 Full Year EPS Guidance
2005 Full Year EPS Guidance Lower Upper Range Range EPS $3.25 $3.30 Growth % vs. ’04 16.1% 17.9% • Higher gross margin from product mix and production efficiencies • Lower effective tax rate (primarily due to continued movement of R&D expenses to the United States) • This includes an adjustment from
Slide 25: Non-GAAP Measures
Non-GAAP Measures Computation of Net Cash (Debt) December 31, December 31, March 31, 2003 2004 2005 Cash and cash equivalents $ 1,086.0 $ 1,093.4 $ 1,312.0 Short term borrowings 1,326.8 911.6 989.3 Current maturities of long term debt 8.5 4.5 5.6 Long term debt, net of current maturities 75.0 71.9 7
Slide 26: Non-GAAP Measures
Non-GAAP Measures Computation of Growth in Trade Receivables and Inventories Trade Receivables Inventories $ in Millions % Change $ in Millions % Change Balance at December 31, 2003 622.8 446.5 Growth at 2003 Rates 36.7 5.9% (24.1) -5.4% Exchange Impact 37.3 32.8 Total Growth 74.0 11.9% 8.7 1.9% Bal
Slide 27: Alcon, Inc.
Alcon, Inc. \X/orldwide Leader y in Ophthalmic Beseayen and Manufacturing