Slide 1: Alcon 4Q20 Earnings Presentation
Alcon 4Q20 Earnings Presentation February 24, 2021 Business Use Only | 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 Key Topics Financial Results Outlook 3
Slide 4: Key Topics
Key Topics
Slide 5: Strong execution, new products drive performance
Strong execution, new products drive performance Surgical Contact Lens 1 2 1 2 Market Growth Alcon Surgical Growth CC Market Growth Alcon Contact Lens Growth CC 10% 10% —% —% (10)% (10)% (20)% (20)% (30)% (30)% (40)% (40)% (50)% (50)% 4Q19 1Q20 2Q20 3Q20 4Q20 4Q19 1Q20 2Q20 3Q20 4Q20 Illustrative Il
Slide 6: Navigating challenges effectively in a global crisis
Navigating challenges effectively in a global crisis PROTECT OUR ASSOCIATES ADVANCE STRATEGIC INITIATIVES MANUFACTURING EXPANSION SERVE OUR CUSTOMERS • Industry safety protocols and • Separation activities near • Continued expansion of contact reopening plan completion lens manufacturing platform to
Slide 7: 11 first-in-market launches in 2020
Strong innovation and commercial execution 11 first-in-market launches in 2020 st st PanOptix: 1 trifocal Vivity: 1 non- Precision1: fastest Pataday: fastest OTC in the US diffractive EDOF IOL growing daily CL in switch in recent the US history Alcon's US PC-IOL Ground-breaking Alcon's leading brand
Slide 8: 4Q20 & 2020 Select Financial Highlights
4Q20 & 2020 Select Financial Highlights TOP LINE PROFITABILITY CORE EPS CASH GENERATION 1 1 1 Third Party Sales Core Operating Margin Core Diluted EPS Free Cash Flow ($M) (%) ($) ($M) 4Q20 1,925 4Q20 14.9 4Q20 0.41 2020 350 4Q19 1,881 4Q19 17.1 4Q19 0.45 2019 367 Strong rebound continues as 4Q20 cor
Slide 9: IFRS Results
IFRS Results
Slide 10: 4Q20 & 2020 IFRS Results
4Q20 & 2020 IFRS Results Worldwide Net Sales Operating Margin EPS $1,881M $1,925M 7.3% $0.19 4Q20 (3.6%) ($0.19) 4Q19 4Q20 4Q19 4Q20 4Q19 4Q20 2% Worldwide Net Sales Operating Margin EPS 7,362 6,763 (2.5%) (7.1%) ($1.34) ($1.09) 2020 2019 2020 2019 2020 2019 2020 (8%) 10
Slide 11: 4Q20 IFRS to Core Operating Income bridge
1 4Q20 IFRS to Core Operating Income bridge (in USD millions) $36 $15 $49 $249 $287 ($166) ($37) $141 IFRS Amortization Impairments Separation Transformation Post- Other items Core of certain costs costs employment intangible benefits assets 1. Core operating income is a non-IFRS measure. An explana
Slide 12: 2020 IFRS to Core Operating Income bridge
1 2020 IFRS to Core Operating Income bridge (in USD millions) $217 $49 $167 $789 $1,021 ($154) ($29) ($482) IFRS Amortization Impairments Separation Transformation Post- Other items Core of certain costs costs employment intangible benefits assets 1. Core operating income is a non-IFRS measure. An e
Slide 13: Core Results
Core Results
Slide 14: 4Q20 Core Results
1 4Q20 Core Results Worldwide Net Sales Core Operating Margin Core Diluted EPS $0.45 $1,881M $1,925M 17.1% $0.41 14.9% 4Q19 4Q20 4Q19 4Q20 4Q19 4Q20 +1% cc 40 bps negative impact from FX $0.03/sh from COVID-19 related charges 1. Core operating margin, core EPS, and constant currency growth, includin
Slide 15: 2020 Core Results
1 2020 Core Results Worldwide Net Sales Core Operating Margin Core Diluted EPS $7,362M $1.89 $6,763M 17.2% 11.7% $1.04 2019 2020 2019 2020 2019 2020 (8%) cc 40 bps negative impact from FX $0.21/sh from COVID-19 related charges 1. Core operating margin, core EPS and constant currency growth, includin
Slide 16: Mix of Vision Care and Surgical Products
Diversified portfolio across businesses and geographies Mix of Vision Care and Surgical Products Vision Care $3.1B (45%) Surgical $3.7B (55%) Ocular Health (40%) Implantables (30%) • Dry eye products • Monofocal intraocular lenses (IOLs) • Allergy eye drops • Advanced technology IOLs • Contact lens
Slide 17: 4Q20 Surgical growth driven by innovation
4Q20 Surgical growth driven by innovation Net Sales 1 (USD) (CC) (USD $M) $1,104 $1,128 2% 1% • PanOptix continues to gain share in the US and Japan + • Positive surgeon feedback in China for PanOptix • Vivity for patients previously disqualified for AT-IOLs $338 $350 4% 4% - • Monofocal IOLs contin
Slide 18: Vision Care growth driven by contact lenses; Precision1 gaining momentum
Vision Care growth driven by contact lenses; Net Sales Precision1 gaining momentum (USD $M) (USD) (CC)1 $777 $797 3% 1% • Growth in reusables + • Strong demand for Precision1 • Prior year contact lens sales impacted by Japanese consumption tax increase $460 $490 7% 5% 2 + • Continued growth from Pat
Slide 19: Core operating margin bridge 4Q20 vs 4Q19
1 Core operating margin bridge Key Drivers: 4Q20 vs 4Q19 (% of net sales) • GM: Primarily higher unabsorbed manufacturing overhead • R&D: Timing of spend 17.1 — 15.3 (0.6) (0.1) 14.9 (1.1) (0.4) 4Q19 GM SG&A R&D Other FX 4Q20 income/expense 1. Core operating margin is a non-IFRS measure. An explanat
Slide 20: Core operating margin bridge 2020 vs 2019
1 Core operating margin bridge Key Drivers: 2020 vs 2019 (% of net sales) • GM: Lower sales leverage, inventory provisions and higher unabsorbed manufacturing overhead • SG&A: Expense deleverage and provisions for expected credit losses related to COVID-19, partially offset by 17.2 reductions in dis
Slide 21: Balance sheet and cash flow to support key investments
Balance sheet and cash flow to support key investments Cash and cash equivalents $1.6 billion 2020 cash flows from operations $823 million 1 2020 free cash flow $350 million Capex $479 million Investing in new contact lens manufacturing lines Debt $4.1 billion Raised $750 million in senior notes in
Slide 22: Serving customers, doctors and patients
Serving customers, doctors and patients See Brilliantly 22
Slide 23: Appendix
Appendix
Slide 24: Non-IFRS measures as defined by the Company
Appendix: Non-IFRS measures as defined by the Company Alcon uses certain non-IFRS metrics when measuring performance, including when measuring current period results against prior periods, including core results, percentage changes measured in constant currencies and free cash flow. Because of their
Slide 25: Reconciliation of IFRS to Core Results
Reconciliation of IFRS to Core Results Three months ended December 31, 2020 Amortization of certain Post- IFRS intangible Separation Transformation employment Other Core (1) (2) (3) (4) (5) (7) ($ millions except earnings per share) results assets Impairments costs costs benefits items results Gross
Slide 26: Reconciliation of IFRS to Core Results
Reconciliation of IFRS to Core Results Three months ended December 31, 2019 Amortization of certain Separation Transformation Other (1) (3) (4) (7) ($ millions except (loss)/earnings per share) IFRS results intangible assets costs costs items Core results Gross profit 913 253 3 — 5 1,174 Operating (
Slide 27: Reconciliation of IFRS to Core Results
Reconciliation of IFRS to Core Results Twelve months ended December 31, 2020 Amortization of certain Post- IFRS intangible Separation Transformation employment Other Core (1) (2) (3) (4) (5) (7) ($ millions except (loss)/earnings per share) Results assets Impairments costs costs benefits items resul
Slide 28: Reconciliation of IFRS to Core Results
Reconciliation of IFRS to Core Results Twelve months ended December 31, 2019 Amortization of IFRS certain intangible Separation Transformation Legal (1) (3) (4) (6) (7) ($ millions except (loss)/earnings per share) results assets costs costs items Other items Core results Gross profit 3,662 1,007 10
Slide 29: Reconciliation of IFRS to Core Results
Reconciliation of IFRS 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 are expected to be incurred over th
Slide 30: Reconciliation of IFRS to Core Results
Reconciliation of IFRS to Core Results Explanatory footnotes to IFRS to Core reconciliation tables (continued) (8) For the three months ended December 31, 2020, total tax adjustments of $38 million include tax associated with operating income core adjustments and discrete tax items. Tax associated w
Slide 31: Reconciliation of Free Cash Flow
Reconciliation of Free Cash Flow The following is a summary of Alcon free cash flow for the twelve months ended December 31, 2020 and 2019 together with a reconciliation to net cash flows from operating activities, the most directly comparable IFRS measure: ($ millions) 2020 2019 Net cash flows from
Slide 32: Alcon
Alcon SEE BRILLIANTLY