Alcon Ag · SIX:ALC
Alcon — Q4 2006 Earnings Presentation
25 slides from Alcon's earnings presentation, Feb 8, 2007
Slide 1: Seeing Beyond Today
Exhibit 99.1 Seeing Beyond Today Fourth Quarter 2006 Webcast February 8, 2007
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 8, 2007, and Alcon does not undert
Slide 3: Management Presentation by
Management Presentation by Cary Rayment Chairman, President & CEO Jacqualyn Fouse Senior Vice President, Chief Financial Officer & Corporate Strategy 3
Slide 4: Business Overview
Business Overview Cary Rayment Chairman, President & CEO 4
Slide 5: Fourth Quarter Financial Highlights
Fourth Quarter Financial Highlights Q4 06 Q4 05 Growth (dollars in millions, except per share amounts) Global Sales $ 1,224.9 $ 1,054.9 16.1% Constant Currency** 13.5% Net Earnings Reported $ 354.7 $ 60.7 NM Adjusted* $ 354.7 $ 257.9 37.5% Diluted EPS Reported $ 1.16 $ 0.19 NM Adjusted* $ 1.16 $ 0.8
Slide 6: Full Year 2006 Financial Highlights
Full Year 2006 Financial Highlights 2006 2005 Growth (dollars in millions, except per share amounts) Global Sales $ 4,896.6 $ 4,368.5 12.1% Constant Currency** 11.7% Net Earnings Reported $ 1,348.1 $ 931.0 44.8% Adjusted* $ 1,342.6 $ 1,078.3 24.5% Diluted EPS Reported $ 4.37 $ 2.98 46.6% Adjusted* $
Slide 7: 2006 Geographic Sales Analysis
2006 Geographic Sales Analysis FY 2006 Sales by Geography $713.1 +21.0% Emerging Markets $2,463.7 14.6% +12.2% U.S. 50.3% Developed Int'l 35.1% $1,719.8 +8.6% (USD millions) 7
Slide 8: Pharmaceutical Sales
Pharmaceutical Sales Q4 Full Year $500 $2,100 +20.4% +13.5% $2,000 $475.9 $2,007.2 $450 $1,900 $1,800 $400 $1,767.7 $395.3 $1,700 $350 $1,600 Q4 2005 Q4 2006 FY 2005 FY 2006 (dollars in millions) 8
Slide 9: Pharmaceutical Growth Drivers – Q4
Pharmaceutical Growth Drivers – Q4 • Glaucoma franchise development – Travatan® ZTM launch in the U.S. leads to share gains – Uptake of DuoTravTM in the EU – Growth of Azopt® on a global basis • Anti-infective/inflammation product line growth – Vigamox® expanding share – Nevanac® gains #2 market sha
Slide 10: Surgical Sales
Surgical Sales Q4 Full Year $650 $1,700 +11.3% $1,650 +9.3% $600 $1,600 $2,203.8 $1,550 $582.5 $550 $1,500 $1,450 $2,016.9 $523.5 $500 $1,400 $1,350 $450 $1,300 Q4 2005 Q4 2006 FY 2005 FY 2006 (dollars in millions) 10
Slide 11: Surgical Growth Drivers – Q4
Surgical Growth Drivers – Q4 • AcrySof® IOL unit growth continues to exceed market procedure growth • Trade-up to premium products – IOLs: AcrySof® IQ and AcrySof® ReSTOR® – Cataract Equipment: Infiniti® with OZilTM – Vitreoretinal Equipment: Accurus® 23- and 25-gauge accessories • Recent regulatory
Slide 12: Consumer Eye Care Sales
Consumer Eye Care Sales Q4 Full Year $200 $725 +22.3% $700 +17.4% $175 $675 $685.6 $650 $150 $166.5 $625 $136.1 $600 $125 $575 $583.9 $100 $550 $525 $75 $500 Q4 2005 Q4 2006 FY 2005 FY 2006 (dollars in millions) 12
Slide 13: Consumer Growth Drivers – Q4
Consumer Growth Drivers – Q4 • Global market share gains in OPTI-FREE® franchise – Alcon brands represent over 50% of U.S. branded market in December – International sales of OPTI-FREE® franchise up over 30% in Q4 • Tears franchise generates growth behind global share gains of Systane® – Exceptional
Slide 14: Financial Review
Financial Review Jacqualyn Fouse Senior Vice President, Chief Financial Officer & Corporate Strategy 14
Slide 15: Q4 2006 Reported Income Statement Detail
Q4 2006 Reported Income Statement Detail Reported % of Reported % of Q4 06 Sales Q4 05 Sales Gross Profit $ 924.7 75.5% $ 799.2 75.8% SG & A 385.9 31.5% 585.3 55.5% R&D 134.5 11.0% 118.9 11.3% Intangible Amortization 11.4 0.9% 21.6 2.0% Operating Income 392.9 32.1% 73.4 7.0% Other Non-Op Income 18.6
Slide 16: Comparable Q4 2006 Income Statement Detail
Comparable Q4 2006 Income Statement Detail Reported % of Adjusted % of Q4 06 Sales Q4 05* Sales Gross Profit $ 924.7 75.5% $ 800.3 75.9% SG & A 385.9 31.5% 347.2 32.9% R&D 134.5 11.0% 122.9 11.7% Intangible Amortization 11.4 0.9% 21.6 2.0% Operating Income 392.9 32.1% 308.6 29.3% Other Non-Op Income
Slide 17: FY 2006 Reported Income Statement Detail
FY 2006 Reported Income Statement Detail Reported % of Reported % of 2006 Sales 2005 Sales Gross Profit $ 3,681.5 75.2% $ 3,290.1 75.3% SG & A 1,398.5 28.6% 1,594.7 36.5% R&D 512.1 10.5% 421.8 9.7% Intangible Amortization 198.8 4.0% 85.7 1.9% Operating Income 1,572.1 32.1% 1,187.9 27.2% Other Non-Op
Slide 18: Comparable FY 2006 Income Statement Detail
Comparable FY 2006 Income Statement Detail Adjusted % of Adjusted % of 2006* Sales 2005* Sales Gross Profit $ 3,700.6 75.6% $ 3,281.2 75.1% SG & A 1,517.5 31.0% 1,391.8 31.9% R&D 512.1 10.5% 445.1 10.2% Intangible Amortization 73.1 1.5% 85.7 1.9% Operating Income 1,597.9 32.6% 1,358.6 31.1% Other No
Slide 19: Reported Tax Rate vs. “Base” Rate
Reported Tax Rate vs. “Base” Rate 2006 2005 2004 “Base” Effective Tax Rate* 21.0% 25.1% 27.8% Total Net Impact of (4.4)% (2.5)% (5.2)% “Non-structural” Items Reported Effective Tax Rate 16.6% 22.6% 22.6% * “Base” effective tax rate is a non-GAAP measure presented to give investors a better compariso
Slide 20: Balance Sheet Highlights
Balance Sheet Highlights 12/31/06 12/31/05 Short and Long Term Borrowings $ 981.3 $ 1,083.4 Cash and Cash Equivalents $ 1,489.2 $ 1,457.2 Consolidated S/H Equity $ 2,913.6 $ 2,556.1 A/R Change (From 12/31/05) 25.8% N/A Inventory Change (From 12/31/05) 10.9% N/A (dollars in millions) 20
Slide 21: 2007 Full Year Financial Guidance
2007 Full Year Financial Guidance • Sales range from $5.35 to $5.45 billion • Reported EPS range from $5.10 to $5.20 • Both figures are consistent with long term targets of 8-10% sales growth and 1.5-2.0 times that in EPS. 21
Slide 22: Seeing Beyond Today
Seeing Beyond Today
Slide 23: FY 2006 Non-GAAP Adjustments
FY 2006 Non-GAAP Adjustments (dollars in millions, except per share amounts) Non-GAAP Adjustments Patent Lawsuits Impairment Non-GAAP Reported Settlement Charges Adjusted* Sales $ 4,896.6 $ -- $ -- $ 4,896.6 Cost of goods sold 1,215.1 -- (19.1) 1,196.0 Gross Profit 3,681.5 -- 19.1 3,700.6 Selling, g
Slide 24: FY 2005 Non-GAAP Adjustments
FY 2005 Non-GAAP Adjustments (dollars in millions, except per share amounts) Non-GAAP Adjustments Patent Lawsuit UK Facility SFAS 123(R) Non-GAAP Reported Judgment Damage Expenses Adjusted* Sales $ 4,368.5 $ -- $ -- $ -- $ 4,368.5 Cost of goods sold 1,078.4 -- (3.2) 12.1 1,087.3 Gross Profit 3,290.1
Slide 25: Q4 2005 Non-GAAP Adjustments
Q4 2005 Non-GAAP Adjustments (dollars in millions, except per share amounts) Non-GAAP Adjustments Patent Lawsuit UK Facility SFAS 123(R) Non-GAAP Reported Judgment Damage Expenses Adjusted* Sales $ 1,054.9 $ -- $ -- $ -- $ 1,054.9 Cost of goods sold 255.7 -- (3.2) 2.1 254.6 Gross Profit 799.2 -- 3.2