Slide 1: Alcon, Inc. 2003 4th Quarter Conference Call
Alcon, Inc. 2003 4th Quarter Conference Call
Slide 2: 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 February 12, 2004, and Alcon does not under
Slide 3: Management Presentation by
Management Presentation by Tim Sear Chairman, President & CEO Jacqualyn Fouse Senior Vice President of Finance & CFO
Slide 4: Financial Results
Financial Results (For the quarters and years ended December 31, 2003 and 2002)
Slide 5: Fourth Quarter Financial Highlights
Fourth Quarter Financial Highlights Q4 03 Q4 02 Growth Global Sales $ 851.7 $ 749.2 13.7% Net Earnings $ 133.9 $ 85.0 57.5% Adjusted Net Earnings $ 133.9 $ 102.9 30.1% Earnings Per Share* $ 0.43 $ 0.26 65.4% *Diluted as reported (dollars in millions, except per share amounts)
Slide 6: Full Year Financial Highlights
Full Year Financial Highlights FY 03 FY 02 Growth Global Sales $3,406.9 $3,009.1 13.2% Net Earnings $ 595.4 $ 466.9 27.5% Adjusted Net Earnings $ 595.4 $ 492.5 20.9% Earnings Per Share* $ 1.92 $ 1.53 25.5% *Diluted as reported (dollars in millions, except per share amounts)
Slide 7: Reported vs. Adjusted Net Earnings
Reported vs. Adjusted Net Earnings Q4 03 Q4 02 FY 03 FY 02 Reported Net Earnings $ 133.9 $ 85.0 $ 595.4 $ 466.9 SKBM Recall -- 25.9 -- 25.9 Deferred Comp Conversion -- -- -- 22.6 IPO Net Interest Income -- -- -- (9.5) Tax Impact of Above Items -- (8.0) -- (13.4) Adjusted Net Earnings* $ 133.9 $ 102.
Slide 8: Fourth Quarter Income Statement Detail
Fourth Quarter Income Statement Detail % of % of Q4 03 Sales Q4 02 Sales Gross Profit $ 594.5 69.8% $ 515.9 68.9% SG & A $ 291.8 34.3% $ 276.9 37.0% Research & Development $ 95.0 11.2% $ 96.1 12.8% Effective Tax Rate 31.3% 23.7% (dollars in millions)
Slide 9: Full Year Income Statement Detail
Full Year Income Statement Detail % of % of FY 03 Sales FY 02 Sales Gross Profit $2,401.0 70.5% $2,116.4 70.3% SG & A $1,112.5 32.7% $1,014.7 33.7% Research & Development $ 349.9 10.3% $ 323.5 10.8% Effective Tax Rate 30.6% 31.1% (dollars in millions)
Slide 10: Balance Sheet Highlights
Balance Sheet Highlights 12/31/03 12/31/02 Short and Long Term Borrowings $ 1,410.3 $ 1,876.7 Cash and Cash Equivalents $ 1,086.0 $ 967.9 Consolidated S/H Equity $ 1,591.5 $ 974.3 A/R Change 13.8% Inventory Change 8.3% (dollars in millions)
Slide 11: Geographic and Product Line Sales
Geographic and Product Line Sales
Slide 12: Geographic Sales Breakdown
Geographic Sales Breakdown YTD 2003 YTD 2002 26.5% 23.5% 7.8% 9.0% 52.4% 13.3% 54.3% 13.2% United States United States Europe Europe Japan Japan Rest of World Rest of World
Slide 13: Product Line Sales - Global
Product Line Sales - Global Full Year 2003 Full Year 2002 36.2% 38.5% 16.0% 46.5% 15.0% 47.8% Surgical Surgical Pharmaceuticals Pharmaceuticals Consumer Consumer
Slide 14: Pharmaceutical Sales
Pharmaceutical Sales 1400 + 20.1% 1200 1000 800 $1,090.4 $1,309.9 600 400 + 21.3% 200 $248.6 $301.6 0 Q4 2002 Q4 2003 FY 2002 FY 2003 (dollars in millions)
Slide 15: Vigamox Conversion Trend
Vigamox Ô Conversion Trend % of Fluoroquinolone Ophthalmologist Only Franchise 100% 80% 60% 75% 76% 72% 40% 68% 62% 20% 50% 0% Jul-03 Aug-03 Sep-03 Oct-03 Nov-03 Dec-03 Vigamox Ciloxan
Slide 16: Vigamox Conversion Trend
Vigamox Ô Conversion Trend % of Fluoroquinolone All Prescribers Franchise 100% 80% 60% 40% 49% 49% 47% 20% 43% 37% 27% 0% Jul-03 Aug-03 Sep-03 Oct-03 Nov-03 Dec-03 Vigamox Ciloxan
Slide 17: Branded Anti-infective Market Shares
Branded Anti-infective Market Shares Vigamoxä All Prescribers Franchise Share Share 14.0 23.0 21.7 12.0 21.0 10.0 19.6 10.6 8.0 19.0 6.0 4.0 17.0 2.0 Vigamox Franchise 0.3 0.0 15.0 May-03 Jun-03 Jul-03 Aug-03 Sep-03 Oct-03 Nov-03 Dec-03
Slide 18: Otic Franchise Share
Otic Franchise Share Market Share % ENT’s Only 45.0 41.2 35.0 25.1 25.0 25.4 22.6 15.0 Jan Feb Mar April May Jun Jul Aug Sep Oct Nov Dec 2002 2003 US Market Share for CiproDex Otic and Cipro HC combined (Cipro is a registered trademark of Bayer AG)
Slide 19: Otic Franchise Share
Otic Franchise Share Market Share % All Prescribers 25.0 24.5 24.0 22.6 20.0 17.8 17.9 15.0 15.3 10.0 Jan Feb Mar April May Jun Jul Aug Sep Oct Nov Dec 2002 2003 US Market Share for CiproDex Otic and Cipro HC combined (Cipro is a registered trademark of Bayer AG)
Slide 20: Surgical Sales
Surgical Sales 1800 1600 + 10.2 % 1400 1200 1000 800 $1,438.5 $1,585.9 600 + 10.7 % 400 200 $385.2 $426.5 0 Q4 2002 Q4 2003 FY 2002 FY 2003 (dollars in millions)
Slide 21: AcrySof Market Share Trend
AcrySof® Market Share Trend Market Share % 60.0 48.3 50.0 45.7 42.3 40.0 40.0 30.0 2000 2001 2002 2003 Q3 YTD US Market Share
Slide 22: AcrySof Natural Conversion Trend
AcrySof® Natural Conversion Trend % of AcrySof® Franchise U.S. - Units 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 17% 20% 5% 12% 0% Sep-03 Oct-03 Nov-03 Dec-03 Natural Conventional
Slide 23: Consumer Eye Care Sales
Consumer Eye Care Sales 600 + 6.4 % 500 400 300 $480.2 $511.1 200 + 7.1 % 100 $115.4 $123.6 0 Q4 2002 Q4 2003 FY 2002 FY 2003 (dollars in millions)
Slide 24: Artificial Tears Franchise Market Share
Artificial Tears Franchise Market Share Systane™ Franchise Share Share 5.0 20.7 20.0 4.5 4.5 4.0 17.8 18.0 3.5 16.0 3.0 2.5 14.0 2.0 Systane 12.0 1.5 1.2 Tears Franchise 1.0 10.0 Apr-03 May- Jun-03 Jul-03 Aug- Sep-03 Oct-03 Nov-03Dec-03 03 03
Slide 25: 2004 Outlook
2004 Outlook
Slide 26: 2004 Full Year Financial Guidance
2004 Full Year Financial Guidance • Sales range from $3.7 to $3.8 billion – Low end of this range excludes currency • EPS range from $2.15 to $2.18
Slide 27: Long-Term Financial Trends
Long-Term Financial Trends • Sales growth between 8%-10% per year – Pharmaceutical 13% - 15% – Surgical 6% - 8% – Consumer 3% - 5% • Gross margin stable through 2005, improving moderately thereafter • SG&A as a percent of sales declines 50 basis points per year on average • R&D equals 10%-11% of sal
Slide 28: Revenue History
Revenue History $1,100 $925.4 $900 $851.7 $807.1 $822.7 $809.5 $700 $743.9 $749.2 $706.5 $500 $300 Q1 Q2 Q3 Q4 2002 2003 (dollars in millions)
Slide 29: Earnings Per Share History
Earnings Per Share History $0.70 $0.57 $0.49 $0.50 $0.43 $0.42 $0.50 $0.40 $0.30 $0.36* $0.33 $0.10 Q1 Q2 Q3 Q4 *Also adjusted for artificially reduced share count from conversion of preferred shares 2002 Adjusted 2003
Slide 30: Alcon, Inc.
Alcon, Inc. Worldwide Leader J in Ophthalmic Research and Manufacturing