Slide 1: Q4 & FY 2022 Earnings Presentation
Q4 & FY 2022 Earnings Presentation February 28, 2023 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 sta
Slide 3: Agenda
Agenda 01 Key topics 02 IFRS results 03 Core results 04 Outlook 3
Slide 4: Key topics
Key topics Alcon
Slide 5: FY 2022 | Highlights
FY 2022 | Highlights • Delivered solid financial results through strong operating fundamentals while navigating significant macro headwinds • Maintained Surgical leadership with PCIOL and equipment portfolio, expanded surgical glaucoma presence with Hydrus Microstent • Contact lenses driven by portf
Slide 6: FY 2022 | Select financial highlights
FY 2022 | Select financial highlights rd 1 1 1 3 party sales Core operating margin Core diluted EPS Free cash flow FY22 8,654 FY22 18.2% FY22 2.24 FY22 $581M FY21 8,222 FY21 17.6% FY21 2.15 FY21 $645M 1 Sales of $8.7B, up 5%, or 11% cc Operating margin of 7.8%, up 70 FY22 diluted EPS of 0.68 vs. FY2
Slide 7: IFRS results
IFRS results Alcon
Slide 8: Q4 2022 | IFRS results
Q4 2022 | IFRS results Worldwide net sales Operating margin Diluted EPS $2.1B $2.2B $0.28 8.5% 1.0% ($0.20) 4Q21 4Q22 4Q21 4Q22 4Q21 4Q22 • 4Q22 impacted by legal items, • 4Q22 loss mainly driven by lower higher transformation costs, operating income and higher taxes 1 inflationary impacts, acquisit
Slide 9: FY 2022 | IFRS results
FY 2022 | IFRS results Worldwide net sales Operating margin Diluted EPS $0.76 $8.7B $0.68 $8.2B 7.8% 7.1% FY21 FY22 FY21 FY22 FY21 FY22 • FY22 impacted by higher legal items, transformation costs, acquisition & integration related 1 expenses, interest & OFE and 2 taxes due to the APA 1. OFE: other f
Slide 10: Q4 2022 | IFRS operating margin bridge
Q4 2022 | IFRS operating margin bridge 4Q22 vs. 4Q21, % of net sales 3.2 (0.3) 8.5 (0.3) 4.1 (7.0) 1.0 (3.1) 4Q21 Gross SG&A R&D Other income/ Foreign 4Q22 Margin expense1 Exchange 10 1. Other income/expense in 4Q22 includes legal settlement costs, higher transformation and acquisition and integrati
Slide 11: FY 2022 | IFRS operating margin bridge
FY 2022 | IFRS operating margin bridge FY22 vs. FY21, % of net sales 2.4 10.1 2.4 (1.5) 7.8 7.1 (2.3) (0.3) FY21 Gross SG&A R&D Other income/ Foreign FY22 Margin expense Exchange 11
Slide 12: Core results
Core results Alcon
Slide 13: Q4 2022 | Core results
1 Q4 2022 | Core results Worldwide net sales Core operating margin Core diluted EPS $0.56 $2.1B $2.2B 16.3% 16.4% $0.42 4Q21 4Q22 4Q21 4Q22 4Q21 4Q22 • +7% cc • +2.4 percentage points (ppts) cc • -4% cc 2 • ~$0.13 2022 impact of APA 1. Core operating margin, core diluted EPS, and constant currency g
Slide 14: FY 2022 | Core results
1 FY 2022 | Core results Worldwide net sales Core operating margin Core diluted EPS 17.6% 18.2% $2.24 $8.7B $2.15 $8.2B FY21 FY22 FY21 FY22 FY21 FY22 • +11% cc • +2.4 ppts cc • +23% cc • ~$0.41 negative FX impact 14 1. Core operating margin, core diluted EPS, and constant currency growth, including
Slide 15: FY 2022 | Product mix
1 FY 2022 | Product mix Vision Care $3.6B (42%) Surgical $5.0B (58%) Ocular health (39%) Implantables (34%) Dry eye products Monofocal IOLs Allergy eye drops Advanced technology IOLs Steroid eye drops Glaucoma implants Glaucoma eye drops $8.7 billion Contact lens care Consumables (50%) Dedicated con
Slide 16: Q4 2022 | Surgical driven by international markets and solid demand for cataract products
Q4 2022 | Surgical driven by Net Sales 1 (USD) (CC) international markets and solid (USD $M) demand for cataract products $1,259 $1,274 1% 8% $416 $434 4% 11% • Improving market conditions across most international markets + • Maintained PCIOL market leadership, continuing demand for Vivity • Sales
Slide 17: Q4 2022 | Vision Care benefited from SiHy contact lenses and eye drops
Q4 2022 | Vision Care benefited from SiHy Net Sales contact lenses and eye drops, offset by (USD $M) (USD) (CC)1 significant supply chain challenges in $875 $881 1% 7% contact lens care • Growth in silicone hydrogel contact lenses, including the Precision1 (1%) 6% + and Total families of lenses: Pre
Slide 18: Q4 2022 | Core operating margin bridge
1 Q4 2022 | Core operating margin bridge 4Q22 vs. 4Q21, % of net sales 2.9 — 18.7 (0.5) 16.4 16.3 — (2.3) 4Q21 Gross Margin SG&A R&D Other income/ Foreign 4Q22 expense Exchange Key drivers • Improved underlying operating leverage from higher sales and favorability from incentive compensation, partia
Slide 19: FY 2022 | Core operating margin bridge
1 FY 2022 | Core operating margin bridge FY22 vs. FY21, % of net sales 0.5 20.0 2.1 (0.1) 18.2 17.6 (1.8) (0.1) FY21 Gross Margin SG&A R&D Other income/ Foreign FY22 expense Exchange Key drivers • Improved operating leverage driven by higher sales and favorability from incentive compensation, partia
Slide 20: FY 2022 | Cash flow & balance sheet highlights
FY 2022 | Cash flow & balance sheet highlights Cash and cash equivalents $1.0 billion FY22 cash flows from operations $1.2 billion 1 FY22 free cash flow $581 million Capex $636 million Investments in new contact lens manufacturing capacity Debt $4.6 billion No financial covenants Includes financing
Slide 21: Outlook
Outlook Alcon
Slide 22: FY 2023 | Outlook
FY 2023 | Outlook 2023 outlook February Net sales (USD) $9.2 to $9.4 billion 1 Change vs. prior year (cc) +6% to +8% 1 Core operating margin 19.5% to 20.5% 2 Interest expense and OFI&E $260 to $280 million 3 Core effective tax rate 17% to 19% 1 Core diluted EPS $2.55 to $2.65 1 Change vs. prior year
Slide 23: Appendix
Appendix 23 ‹#›
Slide 24: Appendix: Non-IFRS measures as defined by the Company
Appendix: Non-IFRS measures as defined by the Company Alcon uses certain non-IFRS metrics when measuring performance, including when measuring current period results against prior periods, including core results, percentage changes measured in constant currencies and free cash flow. Because of their
Slide 25: Reconciliation of IFRS results to core results
Reconciliation of IFRS results to core results Three months ended December 31, 2022 Amortization of IFRS certain intangible Transformation Legal Other Core (1) (2) (4) (6) (7) ($ millions except (loss)/earnings per share) results assets Impairments costs items items results Gross profit 1,170 149 —
Slide 26: Reconciliation of IFRS results to core results
Reconciliation of IFRS results to core results Three months ended December 31, 2021 Amortization of Post- certain employ- IFRS intangible Separation Transformation ment Other Core (1) (2) (3) (4) (5) (7) ($ millions except earnings per share) results assets Impairments costs costs benefits items res
Slide 27: Reconciliation of IFRS results to core results
Reconciliation of IFRS results to core results Twelve months ended December 31, 2022 Amortization of certain intangible Transformation Legal Core (1) (2) (4) (6) (7) ($ millions except earnings per share) IFRS results assets Impairments costs items Other items results Gross profit 4,748 572 59 — — 2
Slide 28: Reconciliation of IFRS results to core results
Reconciliation of IFRS results to core results Twelve months ended December 31, 2021 Amortization Post- of certain Transfor- employ- IFRS intangible Separation mation ment Legal Other Core (1) (2) (3) (4) (5) (6) (7) ($ millions except earnings per share) results assets Impairments costs costs benef
Slide 29: Reconciliation of IFRS results to core results
Reconciliation of IFRS results 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, primarily related to IT an
Slide 30: Reconciliation of free cash flow
Reconciliation of free cash flow The following is a summary of free cash flow for the twelve months ended December 31, 2022 and 2021, together with a reconciliation to net cash flows from operating activities, the most directly comparable IFRS measure: ($ millions) 2022 2021 Net cash flows from oper
Slide 31: Alcon
Alcon SEE BRILLIANTLY