Slide 1: Alcon 1Q20 Earnings Presentation
Alcon 1Q20 Earnings Presentation May 13, 2020 1
Slide 2: Legal Disclaimers
Legal Disclaimers Forward-Looking Statements This document contains “forward-looking statements” within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. Forward- looking statements can be identified by words such as: “anticipate,” “inte
Slide 3: Agenda
Agenda Key Topics 1Q20 Financial Results Outlook 3
Slide 4: Key Topics
Key Topics
Slide 5: 1Q20 Key Topics
1Q20 Key Topics NAVIGATING COVID-19 DRIVING MOMENTUM PREPARING FOR REOPENING DISRUPTION • Strong sales performance through • March sales impacted by COVID-19 • Markets to recover at different February paces • April sales at ~50% expectations (1) • Vision Care: double-digit growth • More normalized r
Slide 6: 1Q20 Financial Accomplishments
1Q20 Financial Accomplishments TOP LINE GROWTH PROFITABILITY CORE EPS CASH GENERATION (1) (1) (1) Third Party Sales Core Operating Margin Core Diluted EPS Free Cash Flow ($M) (%) ($) ($M) 1Q19 1,777 1Q19 17.7 1Q19 0.51 1Q19 (69) 1Q20 1,822 1Q20 16.6 1Q20 0.45 1Q20 (60) Sales growth driven by Core OM
Slide 7: Crisis Management Team leading a globally coordinated response to COVID-19
Alcon's Crisis Management Team leading a globally coordinated response to COVID-19 Associate safety Community Supply Chain • Enhanced safety • Production of critical • Most sites fully protocols across all sites supplies at select sites operational with add'l • Social distancing • Assistance through
Slide 8: Cataracts progressively worsen over time
Cataracts progressively worsen over time Risk of blindness Significant risk of visual impairment: 33% of cases account for 51% of (1) blindness Physical risks Cataract patients prone to fall-related hip-fractures , contributing to greater (2) need for nursing home placement Compromised mobility Driv
Slide 9: Serving customers facing new reality
Serving customers facing new reality Digital marketing Virtual training Restart programs Telehealth eCommerce 9
Slide 10: 1Q20 IFRS Results
1Q20 IFRS Results
Slide 11: 1Q20 IFRS Results
1Q20 IFRS Results Worldwide Net Sales Operating Margin EPS $1,822M $1,777M (2.7)% (1.5)% $(0.22) $(0.12) 1Q19 1Q20 1Q19 1Q20 1Q19 1Q20 +3% 1Q20 includes $0.04 / share of interest expense on financial debt 11
Slide 12: 1Q20 IFRS to Core Operating Income bridge
(1) 1Q20 IFRS to Core Operating Income bridge 71 7 302 259 16 (23) (28) IFRS Amortization of Impairment of Separation Transformation Other Items Core Intangible Intangible Costs Costs Assets Assets (1) Core operating income is a non-IFRS measure. An explanation of non-IFRS measures can be found in t
Slide 13: 1Q20 Core Results
1Q20 Core Results
Slide 14: 1Q20 Core Results
(1) 1Q20 Core Results Worldwide Net Sales Core Operating Margin Core Diluted EPS $1,822M 17.7% $1,777M 16.6% $0.51 $0.45 1Q19 1Q20 1Q19 1Q20 1Q19 1Q20 +4% cc Includes -50 bps FX impact 1Q20 includes $0.04 / share of interest expense on financial debt (1) Core operating margin, core EPS, and constant
Slide 15: Mix of Vision Care and Surgical Products
Diversified portfolio across businesses and geographies Mix of Vision Care and Surgical Products Vision Care $0.8B (46%) Surgical $1.0B (54%) Ocular Health (40%) Implantables (31%) • Dry eye products • Monofocal intra-ocular lenses (IOLs) • Allergy eye drops • Advanced technology IOLs • Contact lens
Slide 16: Surgical business impacted by COVID-19
Surgical business impacted by COVID-19 Net Sales (USD $M) (1) (USD) (CC) $1,000 $984 -2% —% • Strong gains from PANOPTIX in newly launched countries + and continued strong performance in APAC • Growth in service revenues $285 $310 +9% +10% • Temporary slowdown of surgical procedures impacting - cons
Slide 17: Vision Care posted double-digit cc growth
(1) Vision Care posted double-digit cc growth Net Sales (USD $M) (USD) (CC)(1) $777 $838 +8% +10% • DAILIES TOTAL1 growth in sphere and multifocal + • Favorable feedback from PRECISION1 • Successful launch of PATADAY over-the-counter in the US $502 +1% +2% • Strong global performance of SYSTANE $498
Slide 18: PATADAY makes OTC switch in the US
makes OTC switch in the US featuring the #1 prescribed eye allergy itch ingredient CUSTOMER PROFILE Q1 RESULTS: 66M Americans suffer from ocular Solid commercial execution, allergies, with only 10% using OTC product availability and brand (1)(2) eye drops recognition Ideal for customers seeking last
Slide 19: Core operating margin bridge
(1) Core operating margin bridge 1Q20 vs 1Q19 (% of net sales) 17.7 0.6 17.1 16.6 (0.2) (0.3) (0.7) (0.5) 1Q19 GM SG&A R&D Other FX 1Q20 income/expense (1) Core operating margin is a non-IFRS measure. An explanation of non-IFRS measures can be found in the Appendix. 19
Slide 20: Balance sheet and cash flow
Balance sheet and cash flow Cash and cash equivalents $760 million Cash flows from operations $30 million (1) Free cash flow $(60) million Debt $3.5 billion No major maturities before 2024 No financial covenants $1 billion available in existing credit facility Capex $90 million Investing in new VC m
Slide 21: Outlook
Outlook
Slide 22: Increasing financial flexibility
Increasing financial flexibility ACTIONS GOALS $200 million in savings in 2Q20 Keeping our associates safe (travel, meetings, consulting, Supporting our customers sales and marketing) Continuing separation, Re-aligning production transformation schedules VC manufacturing expansion Phasing capital sp
Slide 23: Preparing for the recovery
Preparing for the recovery Product Launch Manufacturing Innovation training preparedness expansion 23
Slide 24: Serve our doctors, patients, customers and associates
Serve our doctors, patients, customers and associates Fulfill our mission See Brilliantly Live Brilliantly 24
Slide 25: Appendix
Appendix Appendix
Slide 26: Non-IFRS measures as defined by the Company
Appendix: Non-IFRS measures as defined by the Company Alcon uses certain non-IFRS metrics when measuring performance, including when measuring current period results against prior periods, including core results, percentage changes measured in constant currencies, and free cash flow. Because of thei
Slide 27: Reconciliation of IFRS to Core Results (Q1 2020)
Reconciliation of IFRS to Core Results Three months ended March 31, 2020 IFRS Amortization of Separation Transformation Other Core (1) (2) (3) (4) (5) ($ millions except (loss)/earnings per share) Results Intangible Assets Impairments Costs Costs Items Results Gross profit 872 252 16 3 — (10) 1,133
Slide 28: Reconciliation of IFRS to Core Results (Q1 2019)
Reconciliation of IFRS to Core Results Three months ended March 31, 2019 IFRS Amortization of Separation Transformation Legal Other Core (1) (2) (3) (4) (5) ($ millions except (loss)/earnings per share) Results Intangible Assets Costs Costs Items Items Results Gross profit 852 250 — — — 8 1,110 Sell
Slide 29: Reconciliation of Free Cash Flow
Reconciliation of Free Cash Flow The following is a summary of Alcon free cash flow for the three months ended March 31, 2020 and 2019, together with a reconciliation to net cash flows from operating activities, the most directly comparable IFRS measure: ($ millions) 2020 2019 Net cash flows from op
Slide 30: Alcon
Alcon SEE BRILLIANTLY