Alcon Ag · SIX:ALC
Alcon — Non-Deal Roadshow (March 2019)
30 slides from Alcon's roadshow presentation, Mar 18, 2019
Slide 1: Investor Presentation
Investor Presentation March 2019
Slide 2: Legal Disclaimers
Legal Disclaimers Forward-Looking Statements This presentation contains “forward-looking statements” that involve risks and uncertainties. These statements can be identified by the fact that they do not relate strictly to historical or current facts, but rather are based on current expectations, est
Slide 3: Alcon at a glance
Alcon at a glance $7b $23b sales market favorable market trends with significant opportunities growing eye care device leader growing at 4%1 to grow and expand #1 or #2 140+ in all categories within countries served by over strong & experienced Surgical & Vision Care1 20,000 employees management tea
Slide 4: In 2016 we outlined a plan - and strong results have followed
In 2016 we outlined a plan - and strong results have followed 1 2 1 Fix the foundation and strengthen execution Sales have returned to growth1 Highest ranking of customer 2 Invest in promotion, capital and systems over the last several quarters satisfaction in major markets; SAP now spans ~60% 3 Rei
Slide 5: Sizeable opportunities with substantial unmet medical need
Sizeable opportunities with substantial unmet medical need could be saved with of visual impairment is 80 % preventable or curable1 $102b appropriate eye care services1 People: 153 million 1.7 billion 352 million 20 million 93 million 67 million with uncorrected have live with are blind have live wi
Slide 6: Eye care devices represent a large and growing $23b market
Eye care devices represent a large and growing $23b market 2017 Industry Sales1 ($b) 2018E-2023E Industry CAGR1 Total Market $23b 4% Implantables2 3 6% Surgical Consumables2 4 $9b 3% CAGR: 4% Equipment / Other2 2 2% Contact Lenses 8 4% Vision Care $14b Ocular Health2 6 CAGR: 4% 4% REFRACTIVE RETINAL
Slide 7: Favorable megatrends underpin strong market potential
Favorable megatrends underpin strong market potential Myopia prevalence is Aging population Increasing wealth growing; increased Innovation improving the with growing eye care and growth from screen time and mobile quality of eye care needs emerging economies device use is impacting vision Populatio
Slide 8: Diversified portfolio across businesses and geographies
Diversified portfolio across businesses and geographies Vision Care $3.1b Surgical $4.0b U.S. $2.9b 16% Implantables 41% 27% Contact Lenses 2018 Sales 2018 Sales $7.1b $7.1b 17% 31% Consumables Ocular Health 59% 9% Equipment / Other International $4.2b 8
Slide 9: Leading position in the global Surgical market
Leading position in the global Surgical market 2018 Global Surgical Sales1 ($b) 2017 Industry 2018E-2023E Sales1 ($b) Industry CAGR1 Others Implantables 3 6% ~$9b Consumables 4 3% 4.0 Market Equipment/Other 2 2% Total 9 4% 1. Market Scope; Alcon internal estimates; see “Legal Disclaimers” on slide 2
Slide 10: The most complete line of ophthalmic surgical devices
The most complete line of ophthalmic surgical devices Surgical sales Market position Products $b 4.0 AcrySof brand IOLs 1.2 Implantables #1 UltraSert pre-loaded IOL Globally Clareon AutonoMe pre-loaded IOL Cataract consumables Vitreoretinal instruments & consumables Consumables #1 Custom surgical pa
Slide 11: Focusing on 2 near term growth drivers
Focusing on 2 near term growth drivers 1 Advanced Technology IOLs 2 Vitreoretinal • Build on new product launches to drive AT-IOL share • Deepen technology penetration in key markets and increase margins • Advance smaller incision surgery and safer vitrectomy • Address barriers to adoption with new
Slide 12: Leading global IOL share with room to grow AT-IOLs
Leading global IOL share with room to grow AT-IOLs Global IOL % of Value % of Segment Description Segment Share Market units per lens Market revenue %, 2017 31 Presbyopia Correcting 5-8x (multi-focal) 22 AT-IOLs 8% 30% Astigmatism Correcting 3-4x (toric) 6 Myopia/Hyperopia 4 Monofocals Correcting 92
Slide 13: Unmatched equipment installed base
Unmatched equipment installed base Alcon equipment installed base (2001-2018) 2017 installed base share (%) 2017 new installs 7th gen 1st gen 52% #1 Globally Phaco 2001 2018 machines 3rd gen 1st gen 48% #1 Globally Vitrectomy 2001 2018 machines1 3rd gen 3 1st gen 34% #1 Globally Refractive 2001 2018
Slide 14: Equipment footprint delivers a recurring consumable contribution
Equipment footprint delivers a recurring consumable contribution Custom Surgical Packs Flexible contracting methods Consumables combining Alcon that enable adoption of latest that work with Alcon equipment & 3rd party products technology • Reduces operating room complexity, improves inventory manage
Slide 15: A leading position in the global Vision Care market
A leading position in the global Vision Care market 2018 Global Vision Care Sales1 ($b) 2017 Industry 2018E-2023E Sales1 ($b) Industry CAGR1 Others Contact 8 4% Lenses ~$14b 3.1 Ocular market Health 6 4% Total 14 4% 1. Source: GFK, Nielsen, IQVIA, CBG, Euromonitor data, Market Scope, Company filings
Slide 16: A leading portfolio of recognizable brands
A leading portfolio of recognizable brands Vision Care sales Market position1 Portfolio includes: $b 3.1 DAILIES TOTAL1 water gradient lenses DAILIES AquaComfort Plus Contact #2 1.9 AIR OPTIX monthly reusable lenses Lenses Globally AIR OPTIX COLORS cosmetic lenses FreshLook cosmetic lenses SYSTANE f
Slide 17: Breakdown of Contact Lens Market sub-categories
Breakdown of Contact Lens Market sub-categories 2017 Contact Lens Market Breakdown1 % Sales MODALITY DESIGN GEOGRAPHY Sphere International Reusable $8b Daily $8b $8b Toric US Cosmetic Multi-Focal • Market shifting from reusable to • Increasing demand for premium lenses • Accelerating growth in under
Slide 18: Significant opportunity for growth in Ocular Health
Significant opportunity for growth in Ocular Health 2017 Ocular Health Market Breakdown1 % Sales #1 Market position #1 Market position Dry Eye Contact Lens Care (CLC) Vitamins Allergy Red Eye Increased awareness Growth in daily lenses Aging population Growth in market with New technology Market of t
Slide 19: Focusing on 2 near term growth drivers
Focusing on 2 near term growth drivers 1 DAILIES TOTAL1 2 Dry Eye • Grow DAILIES TOTAL1 family of products • Continue global roll-out of SYSTANE Complete • Expand presbyopia category through increased consumer • Leverage #1 position in Dry Eye awareness, lens comfort and quality • Grow consumer dema
Slide 20: Rich pipeline to fuel growth into the future
Rich pipeline to fuel growth into the future SELECTED LAUNCHES Recent 2018 - 2020 2020+ Clareon with PanOptix Trifocal (US) 4 major new IOL platforms SURGICAL AutonoMe (Intl) Non-diffractive presbyopia correcting IOL (e.g. accommodating) UltraSert Clareon with AutonoMe (US) Next generation cataract
Slide 21: Alcon Q4 results update
Alcon Q4 results update • Solid growth in Surgical and Vision Care Sales growth • 5% constant-currency growth for full year 2018 • Double digit growth of AT-IOLs Surgical • Robust consumables expansion • Double digit growth of Dailies Total1 Vision Care • Strong performance of Systane franchise • Co
Slide 22: 2023 financial outlook
2023 financial outlook 2023E1 Sales growth Mid-single digit (% CAGR 2018-2023) Core operating margin2 Low-to-mid 20s (%) Capex Mid-single digit (as % of sales) Core tax rate2 High-teens (%) 1. 5 year outlook is subject to various risks and uncertainties. See “Legal Disclaimers” on slide 2 2. Sales g
Slide 23: Committed to delivering significant margin expansion
Committed to delivering significant margin expansion Core operating margin1,2 Drivers of margin improvement (% of sales) Sales acceleration on the back + of near term growth drivers Low-to-mid and new innovation 20% + Favorable product mix Mid-to-high Manufacturing efficiencies from teens % + new lo
Slide 24: Cash flow generation expected to increase 2.5x – 3.0x by 2023
Cash flow generation expected to increase 2.5x – 3.0x by 2023 Free cash flow1,2 ($) Drivers + Sales growth 2.5 - 3.0x + Margin expansion Stabilization of capital + and IT investments 2018 2023E Including separation costs in 2019-2020 of ~$0.3b 1. 5 year outlook for our free cash flow generation is s
Slide 25: Clearly defined capital allocation framework
Clearly defined capital allocation framework Key priorities Returns to Investment shareholders Invest in organic growth drivers Organic Dividends growth Invest in R&D Operating Capital cash flow Share enhancements buyback Disciplined BD&L and M&A Business Development & Licensing (BD&L) Mergers & Acq
Slide 26: BD&L and M&A strategy primarily focused on new technologies
BD&L and M&A strategy primarily focused on new technologies Innovation driven with particular interest in next-generation technologies Focus on bolt-on acquisitions to surgical, Opportunity to leverage Alcon’s global vision care and adjacencies footprint/scale Agnostic to source Flexibility to execu
Slide 27: Maintaining flexibility with our balance sheet and investment grade profile
Maintaining flexibility with our balance sheet and investment grade profile 1 2 3 4 5 Alcon will be Financing at spin Part of this bank Net financial Targeting externally will be provided debt is expected debt of $3b at the investment grade financed by bank debt / to be re-financed time of spin cred
Slide 28: A 100% spinoff will be in the best interest of shareholders
A 100% spinoff will be in the best interest of shareholders Alcon incorporated and headquartered in Switzerland; Fort Worth will continue to be a key location Dual listing on SIX Swiss Exchange and NYSE with one global share (Ticker: ALC) 1 Alcon share for every 5 Novartis shares / ADRs1 Expected co
Slide 29: In summary, the global market leader in eye care devices
In summary, the global market leader in eye care devices Favorable market trends with significant opportunities to grow and expand World leading expertise, focused strategy and strong management team Strong pipeline filled with significant innovation Partner of choice to secure external technologies
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