Alcon Ag · SIX:ALC
Alcon — Investor Day (March 2021)
102 slides from Alcon's investor day presentation, Mar 24, 2021
Slide 1: Capital Markets Day
2021 Capital Markets Day March 24, 2021
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: Presenters
Presenters David Endicott Tim Stonesifer Jeannette Bankes Andy Pawson Chief Executive Officer Chief Financial Officer President, Surgical President, Vision Care Michael Onuscheck Karen King Christina Cheng President, Global Head of Corp. Affairs and Head of Investor Relations Business & Innovation I
Slide 4: Agenda
Agenda CET CT TOPIC SPEAKER Karen King 14:00 08:00 Introduction Christina Cheng Investor Relations David Endicott Driving Growth in Eye Care Chief Executive Officer Tim Stonesifer Unlocking Shareholder Returns Chief Financial Officer Q&A 15:05 09:05 Break Strengthening Leadership Jeannette Bankes 15
Slide 5: Driving Growth in Eye Care
DRIVING GROWTH IN EYE CARE DAVID ENDICOTT, CEO 5
Slide 6: Top Five Reasons to Invest in Alcon
1. Highly attractive markets Top Five 2. Global leader in eye care Reasons 3. Delivering on strategic initiatives to Invest in Alcon 4. Innovating products that improve outcomes 5. Creating shareholder value 6
Slide 7: Operating in Attractive Markets
1. Operating in Attractive Markets
Slide 8: End markets growing 4% historically
End markets #1 $10B in Implantables, growing 4% Surgical Consumables, Equipment/Other, Ocular Health historically1 2015-2019 $15B Vision #2 Care in Contact Lenses 1. Market Scope, GfK, Nielsen, IQVIA, Euromonitor, Alcon internal estimates. 8
Slide 9: Favorable megatrends underpinning solid markets
Favorable megatrends underpinning solid markets Aging population Increasing wealth Increasing myopia New technologies Increasing sense of wellness By 2050, more than The middle class will An estimated 50% Improving patient People are more 2 billion people will grow by ~1.7 billion of the world will
Slide 10: Creating solutions for significant unmet needs
Creating solutions for significant unmet needs 2.2 65 million with moderate to severe vision impairment from cataracts1 1.8 billion have presbyopia1 146 million have diabetic retinopathy1 billion people with some form of visual impairment or blindness1 153 million 1.4 billion 76 million with uncorre
Slide 11: Creating solutions for significant unmet needs
Creating solutions for significant unmet needs 146 million individuals with diabetic retinopathy2 ~37% of US population with presbyopia1 1. ASCRS clinical survey. 2018. 11 2. World Health Organization (WHO), World Report on Vision, 2019.
Slide 12: Global Leader in Eye Care
2. Global Leader in Eye Care
Slide 13: Market leader focused solely on eye health
Market leader focused solely on eye health One of the most complete brand portfolios Leading expertise in eye care History of & strong innovation engine industry firsts Long-standing partnerships Increasing access with customers to eye care 13
Slide 14: Surgical Vision Care Brand Portfolio
Brand Portfolio Surgical Vision Care 14
Slide 15: Driving industry-leading expertise in eye care
Driving industry-leading expertise in eye care CATARACT Diagnostic, visualization, microscope, phaco-emulsification, laser guided capsulotomy, optical lens design and manufacturing, ophthalmic pharma solutions, consumable manufacturing and distribution, digital systems RETINA Diagnostic, visualizati
Slide 16: Delivering first-to-market innovations for 75 years
Delivering first-to-market innovations for 75 years Ocular Health 1950 Alcon’s first two ophthalmic products for minor eye infections and red, itchy eyes Daily silicone 1953 hydrogel lens Founder Robert 2011 Alexander created Launched the world’s first the DROPTAINER and only water gradient eye drop
Slide 17: Developing new products with a customer-centric approach
Developing new products with a customer- centric approach 75 years serving the eye care industry 70 training centers with state-of-the-art facilities 18,000 doctors attended Alcon’s educational programs in 2020 17
Slide 18: Building medical capacity in underdeveloped markets
Building medical capacity in underdeveloped markets 5.5 million patients served by doctors trained under the Phaco Development Program; now replicating in vit-ret 4,000+ doctors in Russia, China, India, Vietnam, Bangladesh, Indonesia, and Nepal trained in the Phaco Development Program 500+ medical m
Slide 19: Delivering on Strategic Initiatives
3. Delivering on Strategic Initiatives
Slide 20: Standing up of Alcon is complete
STANDING UP OF ALCON IS COMPLETE 20
Slide 21: On track with strategic priorities
On track with strategic priorities Separation primarily Transforming Expanding complete Alcon capabilities • Enterprise-wide systems enabling • Four shared service centers • State-of-the-art proprietary speed and agility: Workday, in low-cost countries manufacturing technology Veeva Vault and SAP su
Slide 22: Foundation for a stronger culture in place
Foundation for a stronger culture in place Speed Simplicity Accountability Ownership US OTC switch of Consolidation of Aligned incentive Celebrating brilliant Pataday, leading ocular 500+ brand websites compensation with critical contributions to allergy eye drop, just 17 in six months key performan
Slide 23: Innovating to Improve Outcomes
4. Innovating to Improve Outcomes
Slide 24: Accelerating innovation near-term
Accelerating innovation near-term Silicone hydrogel ATIOLs Eye drops Interconnected or SiHy equipment contact lenses 24
Slide 25: Gaining share in fast growing markets
Gaining share in fast growing markets FAST PRECISION1 toric Vivity PanOptix DAILIES TOTAL1 toric* Market growth Systane MDPF Pataday PRECISION1 Reusables* SLOW LOW HIGH Market share Illustrative purposes only. * Not currently in market. 25
Slide 26: Gaining momentum with PRECISION1 sphere
VISION CARE Gaining momentum with PRECISION1 sphere First contact lens manufactured on our new contact lens platform Democratizes silicone hydrogel for more consumers Improve retention among first-time users dropping out due to poor comfort, end of day acuity or handling issues 26
Slide 27: Establishing a presence in SiHy toric with PRECISION1 for Astigmatism
VISION CARE Establishing a presence in SiHy toric with PRECISION1 for Astigmatism Settles in less than 60 seconds1 Less than 3° of oscillation with each blink1 Stabilized 8 and 4 o’clock points help reduce lower lid interaction1 1. Alcon data on file, 2020. 27
Slide 28: Reigniting the reusable market with TOTAL30
VISION CARE Reigniting the reusable market with TOTAL30 Second lens manufactured on our new contact lens platform Premium-ize reusable SiHy with a unique water gradient surface Leveraging the outstanding comfort of DAILIES TOTAL1 for a lens that feels like nothing on Day 1 and Day 30 28
Slide 29: Broadening patient options with two unique PCIOLs
SURGICAL Broadening patient options with two unique PCIOLs PanOptix: first trifocal IOL in the US for spectacle independence Vivity: first non-diffractive EDOF in the industry Patented X-WAVE technology delivers presbyopia correction with no halos or glare Incremental innovations in IOL delivery sys
Slide 30: ATIOL penetration continues to increase
SURGICAL ATIOL penetration continues to increase New IOL designs, better IOL placement tools and surgeon experience Global ATIOL Market Penetration (% of units) 10% 7% 8% 2020 2016 2019 4 out of 10 US patients are willing to pay for a better performing IOL1 1. Alcon data on file, based on a survey o
Slide 31: Increasing access to industry leading Ocular Health solutions
VISION CARE Increasing access to industry leading Ocular Health solutions Grow the Systane brand with formulations to address different forms of dry eye Expand into important preservative- free category Broaden access to the leading Rx ocular allergy solution with the OTC switches of Pataday family
Slide 32: Expanding into the $400M diagnostics and visualization market
SURGICAL Expanding into the $400M diagnostics and visualization market LuxOR with ORA technology: perform pre-operative diagnostics and digital guidance NGENUITY: 3D visualization for heads-up surgery on complex cases ARGOS: advanced biometry for easier IOL planning and greater precision in cataract
Slide 33: Robust innovation engine pushing the boundaries of eye care today
Robust innovation engine pushing the boundaries of eye care today Disruptive Digital Health Next generation Presbyopia Novel delivery ATIOLs Solutions contact solutions beyond the drop lens design 33
Slide 34: Unlocking Shareholder Value
5. Unlocking Shareholder Value
Slide 35: Unlocking shareholder returns
Unlocking shareholder returns SALES ~$10B by 20251 CORE OPERATING MARGIN approaching mid-20s by 20252 (%) 1. 5-year outlook is subject to various risks and uncertainties. See Legal Disclaimers on page 2 and the assumptions underlying our outlook on page 41 for more information. 35 2. For additional
Slide 36: Key Takeaways
Alcon maintaining leadership in an attractive market Accelerating innovation that improves patient Key and customer outcomes Takeaways Progress on strategic priorities, supporting long-term financial goals Roadmap for $10B sales by 2025, with optionality from market adjacencies 36
Slide 37: Unlocking Shareholder Returns
UNLOCKING SHAREHOLDER RETURNS TIM STONESIFER, CFO 37
Slide 38: Framework for strong shareholder returns
Strong product pipeline driving share gains Framework Focused and nimble business model ... resilient for strong Margin expansion through operating shareholder leverage returns Significant free cash flow ... and solid balance sheet 38
Slide 39: Growing sales aligned with accelerating product pipeline
Growing sales aligned with accelerating product pipeline Sales ($B) $7.4 $7.1 $6.6 $6.8 1 2 3 4 Product approvals 80 64 43 26 1 2 3 4 First-to-market launches 15 14 10 8 1 2016 20172 3 2018 4 2019 39
Slide 40: Business resilience evidenced by rapid 2H 2020 rebound
Business resilience evidenced by rapid 2H 2020 rebound Sales Core operating margin1 Core R&D1 ($B) ($M) $1.9 16.6% $174 $1.8 $1.8 15.3% 14.9% $152 $1.2 $146 $145 1Q20 2Q20 3Q20 4Q20 1Q20 2Q20 3Q20 4Q20 1 1Q20 2 2Q20 3 3Q20 4 4Q20 +4% -34% -1% +1% -6.6% y/y cc growth1 New launches driving 2H recovery
Slide 41: 2019-2025 outlook assumptions
2019-2025 outlook assumptions • Markets return to historical levels by 2H 2021 and onward Outlook assumes: • New product launches drive better than market growth • Efficiencies from optimization of new lens manufacturing platform realized mid-plan • Reinvesting savings from transformation into R&D a
Slide 42: Strong long-term financial goals post-COVID
Strong long-term financial goals post-COVID SALES ~$10B by 20251 (mid-single digit CAGR 2019-2025) CORE OPERATING MARGIN2 approaching mid-20s by 20251 (%) FREE CASH FLOW 2 ~$1.8-$2.0B by 20251 1. 5-year outlook is subject to various risks and uncertainties. See Legal Disclaimers on page 2 and the as
Slide 43: Key categories expected to drive sales growth
Key categories expected to drive sales growth +$3B ~$10B Key growth drivers ~20% SiHy contact lenses ~80% $7B Dry eye & allergy Advanced technology IOLs Digital Health Solutions 2019 Key Other 2025E growth drivers 43
Slide 44: Segment margins expected to converge by 2025
Segment margins expected to converge by 2025 Segment contribution margins1 (% of sales) New contact lens manufacturing lines Surgical 23% Vision Care 18% 18% 14% 2019 2020 2025E 2019 2020 2021E 2022E 2023E 2024E 2025E ILLUSTRATIVE • Vision Care margin expansion from improved optimization on new • Vi
Slide 45: Margin expansion driven primarily by operating leverage
Margin expansion driven primarily by operating leverage Core operating margin1,2 (% of sales) Approaching mid-20s Drivers Sales acceleration from new 17% innovation and pipeline launches Favorable product mix Manufacturing efficiencies from optimization of new contact lens platform 2019 1 Gross 2mar
Slide 46: Generating significant free cash flow
Generating significant free cash flow Free cash flow1,2 ~$1.8B-$2.0B Drivers Accelerating sales growth Expanding margins Stabilizing capital and IT investments $0.4B Completing transformation and separation 2019 2025E 1. 5-year outlook is subject to various risks and uncertainties. See Legal Disclai
Slide 47: Capital allocation priorities remain consistent
Capital allocation priorities remain consistent Invest in Invest in BD&L Return to organic growth and M&A shareholders • R&D investments in developing • Agnostic to the source of • Expect to initiate new dividend next-gen IOLs, surgical suite, innovation in 20211 contact lens and ocular health • Bol
Slide 48: Framework for strong shareholder returns
Strong product pipeline driving share gains Framework Focused and nimble business model ... resilient for strong Margin expansion through operating shareholder leverage returns Significant free cash flow ... and solid balance sheet 48
Slide 49: Strengthening Surgical Leadership
STRENGTHENING SURGICAL LEADERSHIP JEANNETTE BANKES, PRESIDENT SURGICAL 49
Slide 50: Leading position in the global surgical market
SURGICAL Leading position in the global surgical market 2019 industry 2019-2025E 2019 global surgical sales1 ($B) sales1 ($B) industry CAGR1 Others Implantables2 3 ~6% 4.2 ~$10B Consumables2 5 ~3% market Equipment / Other2 2 ~3% Total 10 ~4% 1. Market Scope; Alcon internal estimates; Company press r
Slide 51: Delivering on our 2018 commitments: Surgical
SURGICAL Delivering on our 2018 commitments: What we said • Drive ATIOL share and address barriers • Deepen vitreoretinal penetration in key markets we would do to adoption with new technologies and accelerate conversion to digital surgery • Grew to >50% global ATIOL share • Grew sales 5% globally (
Slide 52: What's next: driving global share in PCIOL market
SURGICAL What’s next: driving global share in PCIOL market AcrySof IQ PanOptix AcrySof IQ Vivity >50% Trifocal IOL Extended Depth of Vision IOL share ~$100M Global PCIOL share Alcon sales for leadership every +100 bps in global PCIOL penetration Alcon PCIOL market share in US Non-diffractive optic d
Slide 53: Gaining share with PanOptix trifocal IOL and ENLIGHTEN technology
SURGICAL What’s next: gaining share with PanOptix, a unique trifocal IOL with patented ENLIGHTEN technology ENLIGHTEN optical technology ENLIGHTEN optical technology Simplified for illustration purposes. Light energy Proprietary design optimizes intermediate focal point (60 cm) – most common middle-
Slide 54: Expanding PCIOL portfolio with Vivity extended depth of focus IOL
SURGICAL What’s next: expanding our PCIOL portfolio with Vivity, the first and only extended depth of focus IOL X-WAVE Technology Visual disturbance profile Proprietary design stretches and shifts Optical bench halo measurements: 4.5mm pupil size1 light without splitting it to deliver visual acuity
Slide 55: Investing in an ecosystem of the future
SURGICAL What’s next: investing in an ecosystem of the future Diagnostics and visualization deliver interconnectivity in office and in OR NGENUITY ARGOS biometer Intra-operative In-office pre-operative cataract visualization, heads-up diagnostics 3D display Alcon Digital Health LuxOR Revalia Equipme
Slide 56: Improving procedure efficiency and patient outcomes
SURGICAL What’s next: improving procedure efficiency and patient outcomes Digital Health Solutions ARGOS biometer NGENUITY Cataract Planner • Faster, easier, better pre-operative • 3D digital visualization system • Cloud-based platform enables biometry solution transforms the surgical experience equ
Slide 57: Focusing on fast-growing and underpenetrated markets
SURGICAL What’s next: focusing on fast-growing and underpenetrated markets +50 international regulatory bps ATIOL penetration >75 filings pending and planned (2018-2019) for 2021 ~60K procedures in videos viewed on product Alcon Experience underpenetrated launches in Academy in 20202 20 underpenetra
Slide 58: Surgical pipeline: rich product flow fueling growth
SURGICAL Surgical pipeline: rich product flow fueling growth 2019 – 2020 2021 – 2022 2023+ PanOptix (US) Vivity (US) Digital Health Solutions Next generation diagnostic Trifocal IOL Non-diffractive extended Cloud-based Cataract Planner All-in-one office diagnostic platform depth of focus IOL Vivity
Slide 59: Key Takeaways
Continuous innovation sustaining leadership position in a growing market Developing integrated equipment ecosystem Key to deliver efficiency in clinic and OR Takeaways Launching best-in-class products to drive global share in PCIOL market Investing in growth markets to drive new revenue streams 59
Slide 60: Accelerating Growth in Vision Care
ACCELERATING GROWTH IN VISION CARE ANDY PAWSON, PRESIDENT VISION CARE 60
Slide 61: Leading position in the global vision care market
VISION CARE Leading position in the global vision care market 2019 industry 2019-2025E 2019 global vision care sales1 ($B) sales1 ($B) industry CAGR1 Others 3.2 Contact ~5% Lenses 9 ~$15B market Ocular 6 ~4% Health Total 15 ~4% 1. GFK, Nielsen, IQVIA, CBG, Euromonitor data, Market Scope, Company fil
Slide 62: Delivering on our 2018 commitments: Vision Care
VISION CARE Delivering on our 2018 commitments: What we said • Deliver 3 novel lens • Drive Ocular Health • Win in daily disposables designs on a new flexible we would do manufacturing base with Systane Complete • Grew DAILIES TOTAL1 multifocal share to 45% in • Launched Systane Complete total daily
Slide 63: Winning in dailies with a superior mainstream SiHy platform
VISION CARE What’s next: winning in dailies with a superior mainstream SiHy platform Alcon’s leading brand in new and switch fits in 2020 Bringing benefits of daily SiHy to wider customer base SMARTSURFACE: a permanent, high performance layer of moisture at the lens surface Concurrent PRECISION1 sph
Slide 64: Launching the only water gradient lens in the $4B reusables market
VISION CARE What’s next: launching best-in-class, only water gradient lens in the $4B reusables market Leveraging DAILIES TOTAL1 water gradient technology New biomimetic surface properties “Feels like nothing” even on day 30 Upgrade monthly wearers to the Total platform Favorable cost profile drivin
Slide 65: Continued innovation in dry eye and allergy
VISION CARE What’s next: continued innovation in dry eye and allergy • Building on Systane family blockbuster potential, • Pataday family has captured #1 US share position and in the high growth and margin dry eye market Alcon now holds more than 50% US market share • Launching 3 Multi-Dose Preserva
Slide 66: Vision Care pipeline: rich product flow fueling growth
VISION CARE Vision Care pipeline: rich product flow fueling growth 2019 – 2020 2021 – 2022 2023+ PRECISION1 (US) PRECISION1 Systane Ultra and Novel contact lens offering Mainstream SiHy (international) Hydration Multi-Dose daily disposable Mainstream SiHy Preservative Free daily disposable Dry eye l
Slide 67: Key Takeaways
Rich product flow driving growth ahead of market Winning in daily disposables with Key PRECISION1 and DAILIES TOTAL1 and entering the fast-growing toric segment Takeaways Reigniting the reusable segment with TOTAL30 Taking share in new segments with Systane Multi-Dose Preservative Free and Pataday 6
Slide 68: Transforming Eye Care
TRANSFORMING EYE CARE MICHAEL ONUSCHECK, PRESIDENT INNOVATION 68
Slide 69: How we think about innovation
How we think about innovation Deep understanding World-class Balanced incremental Agnostic to of eye care needs expertise versus disruptive internal versus external 69
Slide 70: External innovation: rich BD&L activities
External innovation: rich BD&L activities focused on augmenting core business growth Agnostic to the source of innovation Remain the partner of choice for commercializing technologies globally Leverage Alcon’s global footprint and scale Offer flexibility to execute various investment structures Bolt
Slide 71: Expanding the frontiers of eye care through internal and external innovation
Accommodating IOLs Customizable IOLS Robotic technology Continuing to expand the frontiers of eye care Presbyopia correction through internal and external innovation Dry eye delivery devices Next generation retinal tamponades $30B+ addressable markets1 Surgical glaucoma Ophthalmic pharma Corneal tre
Slide 72: Internal innovation: world-class resources focused on pipeline rejuvenation
Internal innovation: world-class resources focused on continued pipeline rejuvenation 26 14 +15% Surgical Vision Care core R&D investment launches since 2018 launches since 2018 versus 2018 1,400 11,000 100+ active projects R&D associates patents granted in development 72
Slide 73: Robust innovation engine pushing the boundaries of eye care today
Robust innovation engine pushing the boundaries of eye care today Disruptive Digital Health Next generation Presbyopia Novel delivery ATIOLs Solutions contact solutions beyond the drop lens design 73
Slide 74: Evolving breakthrough ATIOL technology
SURGICAL Evolving breakthrough ATIOL technology +$200M Multiple programs Up to 2 Diopters PCIOL sales versus 2018 in adjustable IOLs objective accommodation achieved IOL innovation Customizable IOLs True accommodating IOLs Long history of delivering Multiple active programs increasing our Multiple d
Slide 75: Evolving breakthrough ATIOL technology
SURGICAL Evolving breakthrough ATIOL technology Customizable Accommodating Power adjustment Gaze target energy applied near/far (clinical study subject) Increasing power near near near Decreasing power far far far Change in lens power1 Change in optical power2 (bench data) (clinical study subject) L
Slide 76: Enriching our installed base to win the next decade of consumables
SURGICAL Enriching our installed base to win the next decade of consumables Leading installed Driving procedural equipment base consumables annuity Coming soon 30,000+ $2B+ active phaco and vitreoretinal consoles Alcon consumables business Superior fluidics for cataract and vitreoretinal Near-physio
Slide 77: Meaningful solutions that deliver value to practices
SURGICAL Meaningful solutions that deliver value to practices Clinical challenge Technology advancement Lower surge Infiniti break volumes Occlusion break surge (2003) Chamber instability surge volume More efficient Transient fluid rush after micro-liters of fluid (55 mmHG IOP) cataract clearing C
Slide 78: Leveraging our global installed base
SURGICAL Leveraging our global installed base Best-in-class dual Renewing our anchoring technologies in the OR function console Securing the next decade of consumables Coming Harvesting manufacturing cost savings with a soon single platform across cataract and vitreoretinal Creating positive economi
Slide 79: Digitalizing ophthalmology
SURGICAL Digitalizing ophthalmology SMARTSuite Cataract Planner Global and surgeon specific optimization Measure and monitor outcomes, formula results, etc. Run reports, create data-supported documents EMR and device Comprehensive Secure automated Robust optimization and connectivity planning and da
Slide 80: Driving efficiency and improving outcomes with an interconnected digital ecosystem
SURGICAL Driving efficiency and improving outcomes with an interconnected digital ecosystem Efficiency Outcomes1 Cloud-based Artificial Intelligence Planner Planner 90 EMR Visualization 73 55 Console 30 1990 2009 2018 Target Office OR with AI Pre-op Post-op % patients within +/- 0.5D of target Diagn
Slide 81: New manufacturing platform for future contact lens innovation
VISION CARE New manufacturing platform: creating a powerful engine for future innovation in contact lenses From … To ... Finalizing 3rd novel Lens dedicated, fixed manufacturing highly modular, flexible production single modality and chemistry multiple modalities and chemistries semi-automated, rigi
Slide 82: Presbyopia correction: an untapped market opportunity
VISION CARE Presbyopia correction: an untapped market opportunity Multifocal solutions today compromise on distance visual acuity Presbyopia prevalence estimated to be 80% by age 45-551 ~60% of those needing multifocal correction are interested in contacts1 Multifocal category growing ~15% annually1
Slide 83: High contact lens drop-out rate related to presbyopia
VISION CARE High contact lens drop-out rate related to presbyopia for older consumers Contact lens drop-out What we have done accelerates after age 451 Top reasons for drop-out: 1. Problems with vision US contact lens penetration % by users by age bracket 2. Discomfort Water gradient 19 1. technolog
Slide 84: Traditional eye drop delivery remains ripe for innovation
VISION CARE Traditional eye drop delivery remains ripe for innovation Pain points 70% have difficulty aiming eye drops1 50% miss on the first try1 40% use the wrong product for dry eye 33% dry eye patients are diagnosed2 1. Davies et al, Journal of Ophthalmology (June, 2017). 2. Market Scope – 2019
Slide 85: Ocular Health innovation going beyond the drop
VISION CARE Ocular Health innovation going beyond the drop Innovative packaging options to meet unique Premium delivery of Impregnated films that Eluting devices that consumer needs finely misted solutions dissolve over time deliver over time Unique delivery advantage for new and existing agents use
Slide 86: Key Takeaways
Robust product pipeline driving sustainable growth Developing breakthrough innovation to Key expand markets Takeaways Driving the digitalization of eye care Protecting the core business with next generation products 86
Slide 87: Conclusion
Conclusion Alcon is a world-class leader in an attractive market Exciting innovation sustains leadership position and expands markets Best-in-class products fuel growth and market share Operating leverage drives significant margin expansion and free cash flow 87
Slide 88: Appendix
APPENDIX 88
Slide 89: Non-IFRS financial measures
Non-IFRS financial measures 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 non-standardized definiti
Slide 90: Non-IFRS financial measures
Non-IFRS financial measures Constant Currencies Changes in the relative values of non-US currencies to the US dollar can affect Alcon's financial results and financial position. To provide additional information that may be useful to investors, including changes in sales volume, we present informati
Slide 91: Reconciliation of quarterly IFRS to Core Results
Reconciliation of quarterly IFRS to Core Results Three months ended December 31, 2020 Amortization of Post- IFRS certain intangible Separation Transformation employment Other Core ($ millions except earnings per share) results assets(1) Impairments(2) costs(3) costs(4) benefits(5) items(6) results G
Slide 92: Reconciliation of quarterly IFRS to Core Results
Reconciliation of quarterly IFRS to Core Results Three months ended September 30, 2020 Amortization of Post- IFRS certain intangible Separation Transformation employment Other Core ($ millions except (loss)/earnings per share) results assets(1) Impairments(2) costs(3) costs(4) benefits(5) items(6) r
Slide 93: Reconciliation of quarterly IFRS to Core Results
Reconciliation of quarterly IFRS to Core Results Three months ended June 30, 2020 Amortization of IFRS certain intangible Separation Transformation Other Core ($ millions except (loss) per share) results assets(1) Impairments(2) costs(3) costs(4) items(6) results Gross profit 345 250 41 4 - 14 654 O
Slide 94: Reconciliation of quarterly IFRS to Core Results
Reconciliation of quarterly IFRS to Core Results Three months ended March 31, 2020 Amortization of IFRS certain intangible Separation Transformation Other Core ($ millions except (loss)/earnings per share) results assets(1) Impairments(2) costs(3) costs(4) items(6) results Gross profit 872 252 16 3
Slide 95: Reconciliation of quarterly IFRS to Core Results
Reconciliation of quarterly IFRS 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 are expected to be incurred
Slide 96: Reconciliation of quarterly IFRS to Core Results
Reconciliation of quarterly IFRS to Core Results Explanatory footnotes to IFRS to Core reconciliation tables 7) For the three months ended December 31, 2020, total tax adjustments of $38 million include tax associated with operating income core adjustments and discrete tax items. Tax associated with
Slide 97: Reconciliation of annual IFRS to Core Results
Reconciliation of annual IFRS to Core Results Twelve months ended December 31, 2020 Amortization of Post- IFRS certain intangible Separation Transformation employment Other Core ($ millions except (loss)/earnings per share) results assets(1) Impairments(2) costs(3) costs(4) benefits(5) items(7) resu
Slide 98: Reconciliation of annual IFRS to Core Results
Reconciliation of annual IFRS to Core Results Twelve months ended December 31, 2019 IFRS Amortization of certain Separation Transformation Legal Other Core ($ millions except (loss)/earnings per share) results intangible assets(1) costs(3) costs(4) items(6) items(7) results Gross profit 3,662 1,007
Slide 99: Reconciliation of annual IFRS to Core Results
Reconciliation of annual IFRS 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 are expected to be incurred ove
Slide 100: Reconciliation of annual IFRS to Core Results
Reconciliation of annual IFRS to Core Results Explanatory footnotes to IFRS to Core reconciliation tables 8) For the twelve months ended December 31, 2020, total tax adjustments of $228 million include tax associated with operating income core adjustments and discrete tax items. Tax associated with
Slide 101: Reconciliation of Free Cash Flow
Reconciliation of Free Cash Flow The following is a summary of Alcon free cash flow for the twelve months ended December 31, 2019 together with a reconciliation to net cash flows from operating activities, the most directly comparable IFRS measure: ($ millions) 2019 Net cash flows from operating act
Slide 102: Glossary of acronyms
Glossary of acronyms ATIOL Advanced Technology Intraocular Lens BD&L Business, Development & Licensing bps basis points CAPEX Capital Expenditure CAGR Compound Annual Growth Rate EDOF (or EDF) Extended Depth of Focus EMR Electronic Medical Record FDA Food and Drug Administration G&A General & Admist