Slide 1: Q3 2023 Earnings Presentation
Q3 2023 Earnings Presentation November 15, 2023 1
Slide 2: Safe harbor
Safe harbor 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 statements
Slide 3: Agenda
Agenda 01 Key topics 02 Sales 03 IFRS results 04 Core results 05 Outlook 3
Slide 4: Agenda: Key topics
Agenda 01 Key topics 02 Sales 03 IFRS results 04 Core results 05 Outlook 4
Slide 5: Q3 2023 Highlights
Q3 2023 Highlights 1 • 3Q23 sales of $2.3B, up 8%, or 9% cc • 3Q23 operating margin of 12.7%; core operating 1 margin of 19.5% 1 • 3Q23 diluted EPS of $0.41, up 78%, or up 97% cc 1 3Q23 core diluted EPS of $0.66, up 32%, 1 or up 41% cc • Generated $937 million of cash from operating 1 activities and
Slide 6: Q3 2023 Select financial highlights
Q3 2023 Select financial highlights 1 rd 1 3Q23 Sales of $2.3B, up 8%, or 9% cc 3 party sales Core operating margin 3Q23 Operating margin of 12.7%, up 3Q23 $2.3B 19.5% 1 3Q23 300 basis points (bps) y/y; up 420 bps cc 3Q23 Core operating margin of 19.5%, 3Q22 $2.1B 1 3Q22 17.2% up 230 bps, or up 350
Slide 7: Agenda: Sales
Agenda 01 Key topics 02 Sales 03 IFRS results 04 Core results 05 Outlook 7
Slide 8: 9M 2023 Product mix
1 9M 2023 Product mix Vision Care $3.1B (44%) Surgical $4.0B (56%) Ocular health (41%) Implantables (32%) Dry eye products Monofocal IOLs Allergy eye drops Advanced technology IOLs Steroid eye drops Glaucoma implants Glaucoma eye drops $7.0 billion Contact lens care Consumables (51%) Dedicated consu
Slide 9: Q3 2023 Surgical Net Sales
Q3 2023 Surgical Net Sales 1 (USD) (CC) Surgical growth in line with market (USD $M) $1,216 $1,276 5% 6% • Implantables growth led by demand for advanced technology intraocular $401 2% 5% + lenses in international markets • Continued ATIOL global and US market leadership $392 • Consumables growth re
Slide 10: Q3 2023 Vision Care Net Sales
Q3 2023 Vision Care Net Sales Double-digit Vision Care growth reflects strength in (USD $M) (USD) (CC)1 contact lenses and eye drops, including acquired $908 $1,027 13% 13% products, and pricing • Product innovation, including toric modalities of Precision1, Total30 and + Dailies Total1 • Price incr
Slide 11: Agenda: IFRS results
Agenda 01 Key topics 02 Sales 03 IFRS Results 04 Core results 05 Outlook 11
Slide 12: Q3 2023 IFRS results
Q3 2023 IFRS results Worldwide net sales Operating margin Diluted EPS $2.3B $2.1B 12.7% $0.41 9.7% $0.23 3Q22 3Q23 3Q22 3Q23 3Q22 3Q23 Y/Y change (USD): +8% +300 bps +78% 12
Slide 13: 9M 2023 IFRS results
9M 2023 IFRS results Worldwide net sales Operating margin Diluted EPS 11.8% $7.0B $1.10 $6.5B 10.0% $0.87 9M22 9M23 9M22 9M23 9M22 9M23 Y/Y change (USD): +8% +180 bps +26% 13
Slide 14: Q3 2023 IFRS operating margin bridge
Q3 2023 IFRS operating margin bridge 3Q23 vs. 3Q22, % of net sales 13.9 2.0 1.9 12.7 1.5 (1.2) (1.2) 9.7 3Q22 Gross SG&A R&D Other income/ Foreign 3Q23 Margin expense Exchange 14
Slide 15: 9M 2023 IFRS operating margin bridge
9M 2023 IFRS operating margin bridge 9M23 vs. 9M22, % of net sales 1.6 13.1 0.4 1.9 11.8 (0.8) (1.3) 10.0 9M22 Gross SG&A R&D Other income/ Foreign 9M23 Margin expense Exchange 15
Slide 16: Agenda: Core results
Agenda 01 Key topics 02 Sales 03 IFRS results 04 Core results 05 Outlook 16
Slide 17: Q3 2023 Core results
1 Q3 2023 Core results Worldwide net sales Core operating margin Core diluted EPS $2.3B $2.1B $0.66 19.5% 17.2% $0.50 3Q22 3Q23 3Q22 3Q23 3Q22 3Q23 Y/Y change (cc): +9% +350 bps +41% 1. Core operating margin, core diluted EPS, and constant currency growth, including FX impacts, are non-IFRS measures
Slide 18: 9M 2023 Core results
1 9M 2023 Core results Worldwide net sales Core operating margin Core diluted EPS $7.0B $6.5B 20.0% $2.05 18.7% $1.82 9M22 9M23 9M22 9M23 9M22 9M23 Y/Y change (cc): +11% +250 bps +23% 18 1. Core operating margin, core diluted EPS, and constant currency growth, including FX impacts, are non-IFRS meas
Slide 19: Q3 2023 Core operating margin bridge
1 Q3 2023 Core operating margin bridge 3Q23 vs. 3Q22, % of net sales 1.8 0.3 20.7 (0.7) 19.5 2.1 (1.2) 17.2 3Q22 Gross Margin SG&A R&D Other income/ Foreign 3Q23 expense Exchange Key drivers • Improved underlying operating leverage from higher sales and manufacturing efficiencies, partially offset b
Slide 20: 9M 2023 Core operating margin bridge
1 9M 2023 Core operating margin bridge 9M23 vs. 9M22, % of net sales 1.7 — 21.2 1.6 (0.8) 20.0 18.7 (1.2) 9M22 Gross Margin SG&A R&D Other income/ Foreign 9M23 expense Exchange Key drivers • Improved underlying operating leverage from higher sales and manufacturing efficiencies, partially offset inc
Slide 21: 9M 2023 Cash flow and balance sheet highlights
9M 2023 Cash flow and balance sheet highlights Cash and cash equivalents $1.1 billion 9M23 cash flows from operations $937 million 1 9M23 free cash flow $592 million Capex $345 million Investments in new contact lens manufacturing capacity Debt $4.7 billion No financial covenants 21 1. Free cash flo
Slide 22: Agenda: Outlook
Agenda 01 Key topics 02 Sales 03 IFRS results 04 Core results 05 Outlook 22
Slide 23: FY 2023 Outlook
FY 2023 Outlook as of as of as of as of Comments vs. 2023 outlook February May August November August Net sales (USD) $9.2 to $9.4 billion $9.2 to $9.4 billion $9.3 to $9.5 billion $9.3 to $9.4 billion Tightened range 1 Change vs. prior year (cc) +6% to +8% +7% to +9% +9% to +11% +10% to +11% Tighte
Slide 24: Appendix
Appendix 24
Slide 25: Non-IFRS measures as defined by the Company
Appendix: Non-IFRS measures as defined by the Company Alcon uses certain non-IFRS metrics when measuring performance, including when measuring current period results against prior periods, including core results, percentage changes measured in constant currencies and free cash flow. Because of their
Slide 26: Reconciliation of IFRS results to core results (Q3 2023)
Reconciliation of IFRS results to core results (non-IFRS measure) Three months ended September 30, 2023 Core Amortization of results IFRS certain intangible Transformation Other (non-IFRS (1) (3) (5) ($ millions except earnings per share) results assets costs items measure) Gross profit 1,289 166 —
Slide 27: Reconciliation of IFRS results to core results (Q3 2022)
Reconciliation of IFRS results to core results (non-IFRS measure) Three months ended September 30, 2022 Core Amortization of results IFRS certain intangible Transformation Other (non-IFRS (1) (3) (5) ($ millions except earnings per share) results assets costs items measure) Gross profit 1,166 142 —
Slide 28: Reconciliation of IFRS results to core results (9M 2023)
Reconciliation of IFRS results to core results (non-IFRS measure) Nine months ended September 30, 2023 Core Amortization of results certain intangible Transformation Other (non-IFRS (1) (3) (5) ($ millions except earnings per share) IFRS results assets costs items measure) Gross profit 3,957 499 — 1
Slide 29: Reconciliation of IFRS results to core results (9M 2022)
Reconciliation of IFRS results to core results (non-IFRS measure) Nine months ended September 30, 2022 Amortization Core of certain Transfor- results IFRS intangible mation Legal Other (non-IFRS (1) (2) (3) (4) (5) ($ millions except earnings per share) results assets Impairments costs items items m
Slide 30: Explanatory footnotes to IFRS to core reconciliation tables
Reconciliation of IFRS results to core results (non-IFRS measure) 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) Transformation costs, pri
Slide 31: Reconciliation of free cash flow
Reconciliation of free cash flow (non-IFRS measure) The following is a summary of free cash flow for the nine months ended September 30, 2023 and 2022, together with a reconciliation to net cash flows from operating activities, the most directly comparable IFRS measure: ($ millions) 2023 2022 Net ca
Slide 32: Alcon
Alcon SEE BRILLIANTLY