Slide 1: 2019 Earnings Conference
2019 Earnings Conference February 26, 2020
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 Highlights 2019 results 2020 guidance Capital allocation 3
Slide 4: 2019 Highlights
2019 Highlights
Slide 5: 2019 Accomplishments
2019 Accomplishments STAND UP NEW ALCON GROW REVENUE TRANSFORM CULTURE Separation process on track Achieved 2019 financial targets New transformation program while executing a complex spin-off underway to reinvest $200-225M of New functions fully staffed and separation process efficiencies into grow
Slide 6: 2019 Financial accomplishments
2019 Financial accomplishments TOP LINE GROWTH PROFITABILITY CORE EPS CASH GENERATION Third Party Sales ($M) Core Op. Margin (%) Core Diluted EPS Free Cash Flow ($M) 2017 $6,785 2017 16.0 2017 $1.86 2017 $804 2018 $7,149 2018 17.0 2018 $2.00 2018 $616 2019 $7,362 2019 17.2 2019 $1.89 2019 $367 Surgi
Slide 7: PANOPTIX trifocal IOL patient profile and market outlook
PATIENT PROFILE MARKET OUTLOOK Ideal for presbyopic patients seeking One of the most successful launches in acuity across near, intermediate and Alcon’s recent history distance Recently launched in the US and Japan Typically active patients with high- First and only trifocal in the US performance vi
Slide 8: Extended vision lens patient profile and market outlook
PATIENT PROFILE MARKET OUTLOOK The first and only lens that provides Closely monitoring performance in PC-IOL performance with the ease of Europe monofocal patient management US FDA approval pending Uses non-diffractive mechanism of action to deliver extended vision, reducing need for glasses Ideal
Slide 9: Customer profile and market outlook: daily disposable contact lens
CUSTOMER PROFILE MARKET OUTLOOK New customers seeking lasting Targeting the largest segment of performance and silicone hydrogel the fast growing daily disposable (SiHy) comfort market Strong fit set activation and revenue per fit set compared to DAILIES TOTAL1's launch Capacity ramp-up on track, su
Slide 10: PATADAY makes OTC switch in the US
makes OTC switch in the US featuring the #1 prescribed eye allergy itch ingredient CUSTOMER PROFILE MARKET OUTLOOK 66M Americans suffer from ocular Launching March, 2020 allergies, with only 10% using eye OTC drops(1)(2) Offering PATADAY in two strength options Ideal for customers seeking lasting, r
Slide 11: IFRS Results
IFRS Results
Slide 12: Full Year and Fourth Quarter Results (IFRS)
Full Year and Fourth Quarter Results (IFRS) Worldwide Net Sales Operating Margin EPS $7,149M $7,362M (3.5)% (2.5)% $(0.46) $(1.34) 2019 2018 2019 2018 2019 2018 2019 +3% USD 2019 EPS includes separation, spin-readiness and transformation costs, Swiss tax reform impact, interest expense $1,789M $1,88
Slide 13: Core Results
Core Results
Slide 14: Full Year 2019 Results (Core)
Full Year 2019 Results (Core)(1) Worldwide Net Sales Core Operating Core Diluted EPS Margin $7,362M $7,149M 17.2% $2.00 17.0% $1.89 2018 2019 2018 2019 2018 2019 +5% cc(1) 2019 includes -60 bps FX 2019 includes $0.14/sh of interest expense on debt impact(1) and $0.12/sh of FX impact(1) (1) Core oper
Slide 15: Fourth Quarter 2019 Results (Core)
Fourth Quarter 2019 Results (Core)(1) Worldwide Net Sales Core Operating Core Diluted EPS Margin $1,881M 17.1% $1,789M 14.5% $0.45 $0.39 4Q18 4Q19 4Q18 4Q19 4Q18 4Q19 (1) +6% cc 4Q19 includes -20 bps FX 4Q19 includes $0.04/sh of interest expense on debt impact(1) (1) Core operating margin, core EPS
Slide 16: Mix of Vision Care and Surgical Products
Diversified portfolio across businesses and geographies Mix of Vision Care and Surgical Products Vision Care $3.2B (43%) Surgical $4.2B (57%) Ocular Health (38%) Implantables (29%) • Dry eye products • Monofocal intraocular lenses • Contact lens solution • Advanced technology IOLs • Ocular allergy d
Slide 17: Surgical growth continues momentum
Surgical growth continues momentum Net Sales (USD $M) USD CC(1) $1,027 $1,104 7% 8% + • Strong double-digit growth in PANOPTIX trifocal IOL, with recent launches in US and Japan $338 17% 17% $290 • Growth in line with procedural market + • Cataract, vit-ret and refractive posted sales gains 3% 4% •
Slide 18: Innovation drives growth in Vision Care
Innovation drives growth in Vision Care Net Sales (USD $M) USD CC(1) $762 $777 2% 3% + • Double-digit growth in DAILIES TOTAL1 • Strong customer demand for multifocals $450 $460 2% 3% + • Ongoing roll out of SYSTANE Complete across European markets - $312 $317 2% 3% • Contact lens care declining wit
Slide 19: Core operating margin bridge 2019 vs 2018
Core operating margin(1) bridge 2019 vs 2018 (% of net sales) 1.0 17.8 — 17.2 17.0 0.2 (0.4) (0.6) 2018 GM SG&A R&D Other FX 2019 income/expense (1) Core operating margin and constant currencies are non-IFRS measures. Refer to the Appendix for definitions of IFRS measures and reconciliations to the
Slide 20: Core operating margin bridge 4Q19 vs 4Q18
Core operating margin(1) bridge 4Q19 vs 4Q18 (% of net sales) 2.8 — 0.4 17.3 17.1 (0.2) 14.5 (0.4) 4Q18 GM SG&A R&D Other FX 4Q19 income/expense (1) Core operating margin and constant currencies are non-IFRS measures. Refer to the Appendix for definitions of IFRS measures and reconciliations to the
Slide 21: Other financial highlights
Other financial highlights Debt Cash and cash equivalents $3.5 billion $822 million FY cash flows from operations $920 million Paid down debt in certain high interest locations FY free cash flow(1) $367 million Capex Separation and spin readiness $553 million $309 million Investing in new Vision Car
Slide 22: 2020 Guidance
2020 Guidance
Slide 23: 2020 guidance for solid growth
2020 guidance for solid growth 2019 2020 outlook Net sales cc growth(1) 5% 5% – 6% Foreign currency impact -200bps flat to -100 bps Core operating margin(2) 17.2% 17.5% - 18.5% Interest expense / OFI $145M $145 - 155M Core effective tax rate(3) 17.4% 19.5% - 21.5% Core EPS(4) $1.89 $1.95 - $2.05 Eve
Slide 24: Capital allocation priorities: Organic growth and transformation
Capital allocation priorities: Organic growth and transformation Proposed Dividend Shareholder Opportunistic M&A Returns External Research Partnerships New Product Launches Strategic Improve Product Flow BD&L Marketing and R&D New Lens Manufacturing Capacity Drive Organic Growth Complete Separation
Slide 25: Transforming New Alcon
Transforming New Alcon Accelerating innovation and R&D Driving sustainable top/bottom line growth 25
Slide 26: Appendix
Appendix
Slide 27: Appendix: Non-IFRS measures as defined by the Company
Appendix: Non-IFRS measures as defined by the Company Alcon uses certain non-IFRS metrics when measuring performance, including when measuring current period results against prior periods, including core results, percentage changes measured in constant currencies, and free cash flow. Because of thei
Slide 28: Reconciliation of IFRS to Core Results
Reconciliation of IFRS to Core Results Twelve months ended December 31, 2019 Amortization of certain Transformation (1) (2) (3) (4) (5) ($ millions except (loss)/earnings per share) IFRS Results intangible assets Separation costs Costs Legal 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 Twelve months ended December 31, 2018 Amortization of certain Restructuring (1) (2) (3) (4) (5) ($ millions except (loss)/earnings per share) IFRS Results intangible assets Impairments items Legal items Other items Core Results Gross profit 3,192 996 376 — — (2
Slide 30: Reconciliation of IFRS to Core Results
Reconciliation of IFRS to Core Results Twelve months ended December 31, 2017 Amortization of certain intangible Restructuring (1) (2) (3) (4) (5) ($ millions except earnings per share) IFRS Results assets Impairments items Legal items Other items Core Results Gross profit 3,204 1,007 — — — — 4,211 O
Slide 31: Reconciliation of IFRS to Core Results
Reconciliation of IFRS to Core Results Three months ended December 31, 2019 Amortization of certain Separation Transformation (4) (5) (1) (2) (3) ($ millions except (loss)/earnings per share) IFRS Results intangible assets costs Costs Legal items Other items Core Results Gross profit 913 253 3 — — 5
Slide 32: Reconciliation of IFRS to Core Results
Reconciliation of IFRS to Core Results Three months ended December 31, 2018 Amortization of certain (2) Restructuring (4) (5) (1) (3) ($ millions except (loss)/earnings per share) IFRS Results intangible assets Impairments items Legal items Other items Core Results Gross profit 879 245 — — — 2 1,126
Slide 33: Reconciliation of Free Cash Flow
Reconciliation of Free Cash Flow The following is a summary of free cash flow together with a reconciliation to net cash flows from operating activities, the most directly comparable IFRS measure: ($ millions) 2019 2018 2017 Net cash flows from operating activities 920 1,140 1,218 Purchase of proper
Slide 34: so) Official
so) Official Sponsor See Brilliantly of 20/20