Slide 1: Alcon, Inc. Worldwide Leader in Ophthalmic Research and Manufacturing
Alcon, Inc. Worldwide Leader in Ophthalmic Research and Manufacturing
Slide 2: Management Presentation by Cary Rayment and Jacqualyn Fouse
Management Presentation by Cary Rayment Chairman, President & CEO Jacqualyn Fouse Senior Vice President of Finance & CFO 2
Slide 3: Safe Harbor Statement
Safe Harbor Statement Statements contained in this presentation that are forward-looking are based on current expectations that are subject to a number of uncertainties and risks, and actual results may differ materially. This presentation is being made on October 20, 2005, and Alcon does not undert
Slide 4: Third Quarter Financial Highlights
Third Quarter Financial Highlights Q3 05 Q3 04 Growth Global Sales $ 1,071.1 $ 958.1 11.8% Net Earnings $ 295.8 $ 194.3 52.2% Diluted EPS $ 0.95 $ 0.62 53.2% (dollars in millions, except per share amounts) 4
Slide 5: Third Quarter YTD Financial Highlights
Third Quarter YTD Financial Highlights YTD 05 YTD 04* Growth Global Sales $ 3,313.6 $2,960.9 11.9% Net Earnings $ 870.3 $ 626.9 38.8% Diluted EPS $ 2.79 $ 2.02 38.1% *2004 excludes the impact of tax settlements and tax credits of $57.6 million recorded in Q2 2004. This is a non-GAAP measure and is p
Slide 6: Pharmaceutical Business Update
Pharmaceutical Business Update • Key brand development driving broad market share gains • September launch of NevanacTM • Successful defense of Patanol® share position • Continued shift toward higher margin products 6
Slide 7: Surgical Business Update
Surgical Business Update • Launch of AcrySof® ReSTOR® • IOL market share gains • Continued adoption of phaco procedure in emerging markets • Shift toward higher margin products 7
Slide 8: Consumer Business Update
Consumer Business Update • Systane® global market share gains • Growth of Opti-Free® Express® in competitive market • Preparing to launch Opti-Free® ReplenishTM • Strong prescription growth from optometric channel 8
Slide 9: AcrySof ReSTOR Update
AcrySof® ReSTOR® Update • 3,300 physicians trained • 2,000 physicians completed all requirements • 1,100 physicians implanting • 2005 global sales guidance of $45 - $55 million 9
Slide 10: Q3 2005 Sales and Growth by Business Unit
Q3 2005 Sales and Growth by Business Unit Reported Constant Sales Growth Currency Global Sales $ 1,071.1 11.8% 10.5% United States $ 560.5 12.1% 12.1% International $ 510.6 11.4% 8.7% Note: Constant currency sales growth is a non-GAAP measure presented to give investors a (dollars in millions) bette
Slide 11: 2005 YTD Sales and Growth by Business Unit
2005 YTD Sales and Growth by Business Unit Reported Constant Sales Growth Currency Global Sales $ 3,313.6 11.9% 9.7% United States $ 1,676.6 9.3% 9.3% International $ 1,637.0 14.8% 10.2% Note: Constant currency sales growth is a non-GAAP measure presented to give investors a (dollars in millions) be
Slide 12: Geographic Sales Breakdown
Geographic Sales Breakdown Sep 2005 YTD Sep 2004 YTD 27.4% 27.1% 50.6% 51.8% 7.1% 7.6% 14.9% 13.5% United States United States EURMEA EURMEA Japan Japan Rest of World Rest of World 12
Slide 13: Sales by Market Development
Sales by Market Development Sep 2005 YTD Sales Growth Rate 30% 25% 26.9% 20% 15% 20.2% 10% 9.9% 5% 8.3% 0% Developed Emerging Markets Reported Constant Currency Emerging markets contributed 14% of Sep YTD 2005 Sales Note: Constant currency sales growth is a non-GAAP measure presented to give investo
Slide 14: Pharmaceutical Sales
Pharmaceutical Sales $1,600 $1,400 +14.7% $1,200 $1,372.4 $1,000 $1,196.0 $800 $600 +16.3% $400 $200 $376.4 $437.8 $0 Q3 2004 Q3 2005 YTD 2004 YTD 2005 (dollars in millions) 14
Slide 15: Surgical Sales
Surgical Sales $1,600 +11.3% $1,400 $1,493.4 $1,200 $1,341.5 $1,000 $800 $600 +10.4% $400 $438.5 $484.3 $200 $0 Q3 2004 Q3 2005 YTD 2004 YTD 2005 (dollars in millions) 15
Slide 16: Consumer Sales
Consumer Sales $500 +5.8% $450 $400 $447.8 $350 $423.4 $300 $250 $200 +4.1% $150 $100 $143.2 $149.0 $50 $0 Q3 2004 Q3 2005 YTD 2004 YTD 2005 (dollars in millions) 16
Slide 17: Q3 2005 Income Statement Detail
Q3 2005 Income Statement Detail % of % of Q3 05 Sales Q3 04 Sales Gross Profit $ 824.7 77.0% $ 709.5 74.1% SG & A $ 331.1 30.9% $ 310.1 32.4% Research & Development $ 103.6 9.7% $ 101.8 10.6% Operating Profit $ 367.9 34.3% $ 277.0 28.9% (dollars in millions) 17
Slide 18: Q3 YTD 2005 Income Statement Detail
Q3 YTD 2005 Income Statement Detail % of % of YTD 05 Sales YTD 04 Sales Gross Profit $2,490.9 75.2% $2,148.3 72.6% SG & A $1,009.4 30.5% $ 913.2 30.8% Research & Development $ 302.9 9.1% $ 282.0 9.5% Operating Profit $1,114.5 33.6% $ 901.3 30.4% (dollars in millions) 18
Slide 19: Tax Rate Analysis
Tax Rate Analysis Q3 YTD Full Year 2005 2004 Reported effective tax rate 22.7% 22.6% Non-GAAP adjustment -- 5.1% *Adjusted effective tax rate 22.7% 27.7% Note: 2004 full year tax rate excludes the impact of tax settlements and tax credits of $57.6 million recorded in Q2 2004. This is a non-GAAP meas
Slide 20: Non-GAAP Adjustments
Non-GAAP Adjustments Q3 YTD 04 Q3 YTD 04 Net Earnings Diluted EPS Reported $ 684.5 $ 2.20 Non-GAAP Adjustments ($57.6) ($0.18) Adjusted Non-GAAP* $ 626.9 $ 2.02 Note: Q3 YTD 2004 net earnings and diluted EPS excludes the impact of tax settlements and tax credits of $57.6 million recorded in Q2 2004.
Slide 21: Balance Sheet Highlights
Balance Sheet Highlights 9/30/05 12/31/04 Short and Long Term Borrowings $ 964.8 $ 988.0 Cash and Cash Equivalents $ 1,112.5 $ 1,093.4 Consolidated S/H Equity $ 2,560.4 $ 2,187.9 A/R Change (From 12/31/04) 10.6% N/A Inventory Change (From 12/31/04) (6.7%) N/A (dollars in millions) 21
Slide 22: Cash Flow Highlights
Cash Flow Highlights YTD 2005 YTD 2004 Net Cash From Operations $ 1073.1 $ 862.5 Net Cash From Investing $ (529.0) $ (217.5) Free Cash Flow* $ 544.1 $ 645.0 *Free cash flow is a non-GAAP term defined as net cash from operations less net cash from (dollars in millions) investing. Free cash flow is pr
Slide 23: 2005 Outlook
2005 Outlook Alcon 2;
Slide 24: 2005 Financial Guidance: Full Year Sales
2005 Financial Guidance • Full Year Sales range from $4,350 to $4,400 million – Q4 2005 sales range of $1,036 million to $1,086 – Global growth across major product lines – Share gains from recent product launches – AcrySof® ReSTOR® sales – Expect negative currency impact in Q405 24
Slide 25: 2005 Financial Guidance: Full Year EPS
2005 Financial Guidance • Full year EPS range from $3.58 to $3.60 – Q4 2005 EPS range from $0.79 to $0.81 – Higher gross margin from product mix and production efficiencies – Stable to slightly improving SG&A – Q4 2005 effective tax rate higher than Q4 2004 25
Slide 26: Alcon, Inc.
Alcon, Inc. \X/orldwide Leader y in Ophthalmic Beseayen and Manufacturing