Slide 1: Q4 2021 Earnings Presentation
Q4 2021 Earnings Presentation February 16, 2022 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 stat
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: Q4 2021 highlights
Q4 2021 highlights • Sales growing above market in both Surgical and Vision Care • Double-digit sales growth driven by strong demand for key products, new product launches and commercial execution • Continuing market recovery, especially in select international markets • Global market leader in pres
Slide 6: FY 2021 highlights
FY 2021 highlights • Demonstrated resilience of our business despite markets recovering from COVID-19 • Completed separation on time and on budget • Progressed our transformation program • Continued to invest in R&D, launching innovative products that are winning in the market • Continued to expand
Slide 7: Select financial highlights
Select financial highlights Top line Profitability Core EPS Cash generation 1 1 1 Third party sales Core operating margin Core diluted EPS Free cash flow 4Q21 $2,134M 4Q21 16.3% 4Q21 $0.56 FY21 $645M 4Q20 $1,925M 4Q20 14.9% 4Q20 $0.41 FY20 $350M 4Q19 $1,881M 4Q19 17.1% 4Q19 $0.45 FY19 $367M 1 4Q21 s
Slide 8: IFRS results
IFRS results Alcon
Slide 9: IFRS results
IFRS results Worldwide net sales Operating margin Diluted EPS 8.5% $0.28 7.3% $0.19 $2,134M $1,881M $1,925M 4Q21 (3.6%) ($0.19) 4Q19 4Q20 4Q21 4Q19 4Q20 4Q21 4Q19 4Q20 4Q21 Worldwide net sales Operating margin Diluted EPS $8,222M 7.1% $0.76 $7,362M $6,763M FY21 (2.5%) (7.1%) ($1.09) ($1.34) FY19 FY2
Slide 10: IFRS operating margin bridge
IFRS operating margin bridge % of net sales 4.1 9.3 8.5 8.2 0.3 0.3 (0.8) 4Q21 (3.6) 4Q19 GM SG&A R&D Other FX 4Q21 income/expense 2.9 7.4 7.1 1.5 6.8 (0.3) (1.3) FY21 (2.5) FY19 GM SG&A R&D Other FX FY21 income/expense 10
Slide 11: Core results
Core results Alcon
Slide 12: Q4 2021 core results
1 Q4 2021 core results Worldwide net sales Core operating margin Core diluted EPS $0.56 $2,134M 17.1% 16.3% $1,881M $1,925M 14.9% $0.45 $0.41 4Q19 4Q20 4Q21 4Q19 4Q20 4Q21 4Q19 4Q20 4Q21 +13% cc vs. 4Q20 FX vs. 4Q20: (50) bps +15% cc vs. 4Q19 FX vs. 4Q19: (80) bps 1. Core operating margin, core dilu
Slide 13: FY 2021 core results
1 FY 2021 core results Worldwide net sales Core operating margin Core diluted EPS 17.2% 17.6% $2.15 $8,222M $7,362M $1.89 $6,763M 11.7% $1.04 FY19 FY20 FY21 FY19 FY20 FY21 FY19 FY20 FY21 +20% cc vs. FY20 FX vs. FY20: +30 bps +12% cc vs. FY19 FX vs. FY19: (30) bps 1. Core operating margin, core dilut
Slide 14: FY 2021 product mix
1 FY 2021 product mix Vision Care $3.5B (43%) Surgical $4.7B (57%) Ocular health (39%) Implantables (32%) Dry eye products Monofocal IOLs Allergy eye drops Advanced technology IOLs Contact lens solution Glaucoma eye drops Consumables (51%) Dedicated consumables $8.2 billion Contact lenses (61%) Cust
Slide 15: Surgical product innovation drives above-market growth
4Q21 vs. 4Q19 Surgical product innovation drives Net Sales (USD $M) (USD) (CC) 1 above-market growth $1,259 14% 15% $1,104 • Maintained PCIOL market leadership with PanOptix 23% 27% $416 + and Vivity $338 • Strong demand for Vivity, which is increasing the number of patients using ATIOLs 8% 8% $639
Slide 16: Vision Care above-market growth driven by SiHy contact lenses and Systane
4Q21 vs. 4Q19 Net Sales Vision Care above-market growth (USD $M) (USD) (CC)1 driven by SiHy contact lenses and Systane $875 13% 13% $777 • Strong demand for SiHy contact lenses, including + Precision1, Precision1 for Astigmatism and Dailies $533 16% 16% Total1 $460 • Strong demand for Systane artifi
Slide 17: Core operating margin bridge
4Q21 vs. 4Q19 1 Core operating margin bridge % of net sales 0.6 — 0.1 17.1 17.1 (0.7) 16.3 (0.8) 4Q19 GM SG&A R&D Other FX 4Q21 income/expense Key drivers • Higher sales and favorable mix offset by higher OI&E • FX impact driven by appreciating US Dollar 1. Core operating margin is a non-IFRS measur
Slide 18: Core operating margin bridge
FY21 vs. FY19 1 Core operating margin bridge % of net sales 1.1 17.9 17.6 17.2 0.1 (0.3) (0.2) (0.3) FY19 GM SG&A R&D Other FX FY21 income/expense Key drivers • Operating leverage as sales growth outpaces increases in SG&A 1. Core operating margin is a non-IFRS measure. An explanation of non-IFRS me
Slide 19: Cash flow and balance sheet highlights
Cash flow and balance sheet highlights Cash and cash equivalents $1.6 billion FY21 cash flows from operations $1.3 billion 1 FY21 free cash flow $645 million Capex $700 million Investing in new contact lens manufacturing capacity Debt $4.1 billion No financial covenants 1. Free cash flow is a non-IF
Slide 20: Outlook
Outlook Alcon
Slide 21: FY 2022 outlook
FY 2022 outlook Change vs. 2021 2021 actuals 2022 outlook 1 actuals (cc) Net sales $8.2 billion $8.7 to $8.9 billion +7% to +9% 1 Core operating margin 17.6% 18% to 19% 2 Interest expense and OFI&E $162M $180 to $190M 3 Core effective tax rate 17% 17% to 19% 1 Core diluted earnings per share $2.15 $
Slide 22: Appendix
Appendix 22 ‹#›
Slide 23: 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 24: Reconciliation of IFRS results to core results
Reconciliation of IFRS results to core results Three months ended December 31, 2021 Amortization Post- of 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 25: Reconciliation of IFRS results to core results
Reconciliation of IFRS results to core results Three months ended December 31, 2020 Amortization Post of 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 resu
Slide 26: Reconciliation of IFRS results to core results
Reconciliation of IFRS results to core results Three months ended December 31, 2019 Amortization of IFRS certain intangible Other Core (1) (3) (4) (7) ($ millions except (loss)/earnings per share) results assets Separation costs Transformation costs items results Gross profit 913 253 3 — 5 1,174 Ope
Slide 27: 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 28: Reconciliation of IFRS results to core results
Reconciliation of IFRS results to core results Twelve months ended December 31, 2020 Amortization of certain Post- IFRS intangible Separation Transformation employment Other Core (1) (2) (3) (4) (5) (7) ($ millions except (loss)/earnings per share) results assets Impairments costs costs benefits ite
Slide 29: Reconciliation of IFRS results to core results
Reconciliation of IFRS results to core results Twelve months ended December 31, 2019 Amortization of certain IFRS intangible Separation Transformation Core (1) (3) (4) (6) (7) ($ millions except (loss)/earnings per share) results assets costs costs Legal items Other items results Gross profit 3,662
Slide 30: 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 31: Reconciliation of IFRS results to core results
Reconciliation of IFRS results to core results Explanatory footnotes to IFRS to core reconciliation tables (con't) (8) For the three months ended December 31, 2021, total tax adjustments of $30 million include tax associated with operating income core adjustments of $166 million with an average tax
Slide 32: Net sales
Net sales 2021 compared to 2020 2021 compared to 2019 Three months ended Three months ended December 31 Change % December 31 Change % ($ millions unless indicated otherwise) 2021 2020 $ cc (1) 2019 $ cc (1) Surgical Implantables 416 350 19 21 338 23 27 Consumables 639 587 9 11 594 8 8 Equipment/othe
Slide 33: Net sales
Net sales 2021 compared to 2020 2021 compared to 2019 Twelve months ended Twelve months ended December 31 Change % December 31 Change % ($ millions unless indicated otherwise) 2021 2020 $ cc (1) 2019 $ cc (1) Surgical Implantables 1,522 1,126 35 34 1,210 26 27 Consumables 2,388 1,952 22 21 2,304 4 3
Slide 34: 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, 2021, 2020 and 2019, together with a reconciliation to net cash flows from operating activities, the most directly comparable IFRS measure: ($ millions) 2021 2020 2019 Net cash flow
Slide 35: Alcon
Alcon SEE BRILLIANTLY