Alcon Ag · SIX:ALC
Alcon — Investor Day (March 2023)
102 slides from Alcon's investor day presentation, Mar 30, 2023
Slide 1: Capital Markets Day
CAPITAL MARKETS DAY March 30, 2023
Slide 2: Agenda
Agenda CET CT TOPIC SPEAKER Dan Cravens 15:00 08:00 Introduction VP, Investor Relations David Endicott Leading in Eye Care Chief Executive Officer Tim Stonesifer Value Creation through Profitable Growth Chief Financial Officer Q&A 16:30 09:30 Break Jeannette Bankes 17:00 10:00 Leading in Ophthalmic
Slide 3: Safe harbor
Safe harbor 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 statements can be identified by words
Slide 4: Leading in eye care
Leading in eye care David Endicott Chief Executive Officer Some products discussed may not be approved for sale or use.
Slide 5: Why Alcon
We are a global leader in resilient and growing markets We win through long-standing, superior Why specialty market and technical expertise Alcon We have a strong track record of delivering results We focus on long-term shareholder value 5
Slide 6: We are a global leader in resilient and growing markets
We are a global leader in resilient and growing markets
Slide 7: Resilient markets underpinned by durable megatrends
LEADERS IN ROBUST MARKETS AGING POPULATION By 2050, more than 2 billion people will be over age 601 OCULAR INCREASING WEALTH COMORBIDITIES The middle class will grow by Diabetes and hypertension ~1.7 billion people in 10-15 years2 tied to retinal disease plays in resilient markets, underpinned by du
Slide 8: The need for eye care is significant and largely unmet
LEADERS IN ROBUST MARKETS The need for eye care is significant and largely unmet 90 % of visual impairment is preventable or curable1 153 million 1.8 billion 1.4 billion with uncorrected have live with refractive errors2 presbyopia3 dry eyes4 could be saved with ~ $100B appropriate eye care services
Slide 9: Eye care is a large market expected to grow by mid-single digits
LEADERS IN ROBUST MARKETS Eye care is a large market that is expected to grow by mid-single digits 2022 Industry Sales1 ($B) 2022-2027E Industry CAGR1 Total Market $32B ~5% Implantables2 $4 ~6% Surgical Consumables2 $6 $12B ~4% CAGR: ~5% Equipment / Other2 $2 ~6% Contact Lenses $10 ~5% Vision Care $
Slide 10: Alcon is a market leader with highly differentiated products
LEADERS IN ROBUST MARKETS Alcon is a market leader with highly differentiated products Surgical Vision Care Implantables Consumables Equipment / Other Contact Lenses1 Ocular Health2 Market #1 #1 #1 #2 #1 Position Key Brands 2022 Sales $1.7B $2.5B $0.8B $2.2B $1.4B (2022 cc y/y (+20%) (+10%) (+10%) (
Slide 11: We win through superior specialty market and technical expertise
We win through superior specialty market and technical expertise
Slide 12: Alcon strategy
Specialty market expertise • Data driven customer insights • Market assessment • Market access & development • Global commercialization Alcon strategy Specialty technology expertise • Optical design and engineering • Clinical endpoints and trial design We focus on eye care • Formulations and drug de
Slide 13: We attract and retain experts in eye care, customers and technology
ALCON STRATEGY We attract and retain experts in eye care, customers and technology CATARACT Alcon is the world’s Diagnostic, visualization, microscope, phaco-emulsification, laser guided capsulotomy, optical lens design and manufacturing, ophthalmic pharma leading repository solutions, consumable ma
Slide 14: We aspire to lead the world in eye care innovation
ALCON STRATEGY We aspire to lead the world in eye care innovation A solid mix 1,600 100+ of incremental R&D associates Active projects in 2022 and monumental innovation drives consistent, accretive growth $3.1B+ 7 – 9% Core R&D1 of sales invested investment in core R&D1 since 2018 each year 1. Core
Slide 15: Create data that demonstrates value and drives access
ALCON STRATEGY Create data that demonstrates value and drives access Convert business priorities into scientific questions to support studies that are high quality and high value Strong expertise in generating and communicating data that is meaningful to eye care professionals Drive awareness with a
Slide 16: Expertise in commercializing products that improve vision
ALCON STRATEGY Expertise in commercializing products that improve vision ALC Global PCIOL market ALC US contact lens ALC US dry eye market share evolution1 market share evolution2 share evolution3 ~31% ~41% ~55% ~38% ~28% ~37% Q3 2019 Q4 2022 Q3 2019 Q4 2022 Q3 2019 Q4 2022 1. Source: MarketScope 2.
Slide 17: We have a strong track record of delivering results
We have a strong track record of delivering results
Slide 18: Significant surgical product flow since spin
STRONG TRACK RECORD Significant surgical product flow since spin 2019–2020 2021–2022 2023+ (US) Next-Gen Diagnostic (US) Next-Gen Phaco-vit Next-Gen IOLs biometer (International) (US) List is no t exhaustive. New product launches may not be listed in chronological order. See Safe harbor statement an
Slide 19: Significant vision care product flow since spin
STRONG TRACK RECORD Significant vision care product flow since spin 2019–2020 2021–2022 2023+ for Astigmatism for Astigmatism Multifocal Twice Daily and Once Daily (US) for Astigmatism Complete, Ultra and Hydration Once Daily Mult-Dose Extra Strength (US) Preservative-Free. List is no t exhaustive.
Slide 20: New product launches drive growth
STRONG TRACK RECORD New product launches drive growth Alcon net sales from new products ~13% CAGR New products driving sales growth on top of a stable base COVID-19 business Source: Company data on file. 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4
Slide 21: Transformation: optimizing our business model
STRONG TRACK RECORD Transformation: optimizing our business model for speed, simplicity and customer focus Reducing functional costs... While increasing our focus on customers... Core functional costs Core SG&A 1 % of sales Core R&D 1 Investing 46.0 43.5 in R&D 7.9 8.1 Investing in marketing & sales
Slide 22: Value creation in a volatile environment
STRONG TRACK RECORD Value creation in a volatile environment NET SALES CAGR1 +5.5% (+7.7% cc1) Significant sales since 2019 and core operating income1 CORE OPERATING MARGIN1 growth since spin +100 bps (+350 bps cc ) 1 since 2019 1. For additional information regarding CAGR, constant currency (cc), C
Slide 23: We focus on long-term shareholder value
We focus on long-term shareholder value
Slide 24: Delivering long-term shareholder value
VALUE CREATION Delivering long-term shareholder value SALES ~$12B by 20271 (above-market growth) Strong CORE OPERATING MARGIN2 long-term mid-20s financial goals by 20271 FREE CASH FLOW2 ~$2.2B by 20271 1. 5-year outlook is subject to various risks and uncertainties. See Safe harbor statement and the
Slide 25: Our corporate responsibility philosophy
VALUE CREATION Our corporate responsibility philosophy Where good business and good citizenship intersect Our strategy leads with our mission to help the world See Brilliantly. It is focused on 3 areas: Brilliant Lives Brilliant Innovation Brilliant Planet 2 social targets to improve vision for chil
Slide 26: Our Purpose: We help people See Brilliantly
Our Purpose: We help people See Brilliantly 26
Slide 27: Value creation through profitable growth
Value creation through profitable growth Tim Stonesifer Chief Financial Officer Some products discussed may not be approved for sale or use.
Slide 28: Framework for shareholder returns
Strong product portfolio underpinned by specialty market and technology expertise Focused business in resilient Framework for and growing markets shareholder returns Margin expansion from operating leverage and resource allocation discipline Significant cash flow growth… and solid balance sheet 28 2
Slide 29: Strong business performance in a challenging environment
Strong business performance in a challenging environment Net Sales (+5.5% CAGR ‘19-’22 in USD, +7.7% CC CAGR1 ‘19-’22) $9.2B - $9.4B • PCIOL market leadership $8.2B $8.7B $7.4B $6.8B • Share gains in contact lenses • Expanding ocular health footprint 2019 2020 2021 2022 2023E Core Operating Income1
Slide 30: Strong operational performance against CMD 2021 goals
Strong operational performance against CMD 2021 goals Net Sales Core Operating Margin1 (as % of Sales) approaching $10.0B $10.0B mid-20s ~22% $9.2B - $9.4B 19.5% - 20.5% 2023E FX 2023E 2025 2023E FX 2023E 2025 FX adjusted2 CMD21 FX adjusted2 CMD21 Key Changes Key Changes • Share gains in ATIOL and c
Slide 31: 2022 - 2027 outlook assumptions
2022 - 2027 outlook assumptions Outlook assumes: • Markets grow at historical rates (~5%) • Innovation drives above-market growth for Alcon • Core R&D1 spend of 7-9% of sales to maintain robust pipeline • Core effective tax rate2 of approximately 20% • No significant impact from foreign currency • C
Slide 32: Strong long-term financial goals
SALES ~$12B by 20271 (above-market CAGR, 2022-2027) Strong CORE OPERATING MARGIN2 long-term mid-20s financial goals by 20271 FREE CASH FLOW2 ~$2.2B by 20271 1. 5-year outlook is subject to various risks and uncertainties. See safe harbor statement and the assumptions underlying our outlook for more
Slide 33: Sales growth driven by four key drivers
Sales growth driven by four key drivers Net Sales1 Key Growth Drivers ~$12B SiHy contact lenses $8.7B Next generation equipment and diagnostics Advanced technology IOLs Eye drops 2022 Key growth Other 2027E drivers 1. 5-year outlook is subject to various risks and uncertainties. See safe harbor stat
Slide 34: Core operating margin expansion driven by leverage
Core operating margin expansion driven by leverage Core operating margin1,2 Drivers (% of sales) mid-20s Sales acceleration from innovation and new product launches 19.5% - 20.5% Manufacturing efficiencies 18.2% Transformation and infrastructure leverage 2022 2023E 2024E 2025E 2026E 2027E 1. 5-year
Slide 35: Expanding margins in both Surgical and Vision Care
Expanding margins in both Surgical and Vision Care Segment contribution margin1 Key Drivers of margin 2023-20271 (% of sales) Surgical Vision Care • Operating leverage • Productivity gains ~27% • Eye drops • Reusables contact lens launches ~17% • Dailies contact lens growth • Equipment launches 2022
Slide 36: Business plan to drive significant cash flow generation
Business plan to drive significant cash flow generation Free Cash Flow1,2 Drivers ~$2.2B Sales growth and expanding margins Stabilizing capital investments and inventory levels ~$0.6B Completing transformation and new business integration 2022 Notable Volume Margin Other Tax 2027E items in 20223 1.
Slide 37: 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 investment • Agnostic to the source of • Dividend • New product launches innovation • Payout policy of 10% of • Capacity expansion • Bolt-on acquisitions and core net income1,
Slide 38: Framework for shareholder returns
Strong product portfolio underpinned by specialty market and technology expertise Focused business in resilient Framework for and growing markets shareholder returns Margin expansion from operating leverage and resource allocation discipline Significant cash flow growth… and solid balance sheet 38 3
Slide 39: Leading in ophthalmic surgery
Leading in ophthalmic surgery Jeannette Bankes President & General Manager, Surgical Some products discussed may not be approved for sale or use.
Slide 40: Surgical | Overall market
Surgical | Overall market Leading in a strong global surgical market 2022 Global Surgical Sales 2022 Industry Sales Industry CAGR $B $B %, 2022-2027E Others Implantables $4 ~6% $5.0 Consumables $6 ~4% ~$12B market Equipment/ ~6% $2 Other Total $12 ~5% Market Scope; Alcon internal estimates; Company
Slide 41: Surgical | Alcon portfolio
Surgical | Alcon portfolio Driving growth across three pillars 1 2 3 Cataract / Vit-Ret Equipment ecosystem Intraocular lenses Emerging businesses (IOLs) Surgical Refractive | glaucoma Alcon sales: $3.0B1 $1.7B $0.3B $0.1B Alcon 2022 sales. 1. Equipment + Consumables for cataract and vit-ret. 41
Slide 42: Surgical | Equipment ecosystem today
EQUIPMENT ECOSYSTEM Surgical | Equipment ecosystem today Comprehensive portfolio that spans the clinic and operating room Clinic Operating Room ARGOS NGENUITY LUXOR REVALIA LENSX CENTURION & CONSUMABLES CONSTELLATION In-office pre-operative First intra-operative Intra-operative Femtosecond laser Cat
Slide 43: Surgical | Equipment pipeline
EQUIPMENT ECOSYSTEM Surgical | Equipment pipeline Investing in three key areas of unmet needs System economics Connectivity Patient outcomes Speed and safety Seamless surgeon Best-in-class innovation to improvements to optimize experience across all help patients see brilliantly surgeon workflow eff
Slide 44: Surgical | Equipment pipeline
EQUIPMENT ECOSYSTEM Surgical | Equipment pipeline Alcon positioned to capitalize on ~$1.5B in equipment and consumables market growth Global Market Revenue Alcon positioned for continued market leadership Equipment + consumables1 + ~$1.5B Best-in-class Alcon Premium equipment ecosystem consumables $
Slide 45: Equipment pipeline: diagnostics
EQUIPMENT ECOSYSTEM Surgical | Equipment pipeline: diagnostics Launching first-of-its-kind whole eye analyzer to drive clinic footprint and ATIOL adoption Today Pipeline Time savings Reduce ATIOL pre-op time by up to ~50%1 Cost savings Lower equipment acquisition cost by up to ~40% Reduced refractiv
Slide 46: Equipment pipeline: phaco-vit consoles
EQUIPMENT ECOSYSTEM Surgical | Equipment pipeline: phaco-vit consoles New industry standard in console technology will drive upgrades and capture share Today Pipeline Dual platform with best-in-class vit-ret and cataract functionality in single platform Technical innovation resulting in unprecedente
Slide 47: Equipment pipeline: digital connectivity
EQUIPMENT ECOSYSTEM Surgical | Equipment pipeline: digital connectivity Alcon’s digital platform simplifies surgeon workflow and connects Alcon’s ecosystem Clinic Operating Room UNITY DX1 UNITY VCS2 Next-gen Next-gen SMARTCATARACT UNITY CS microscope consumables Cloud-based digital platform to deliv
Slide 48: Surgical | IOL pipeline
INTRAOCULAR LENSES Surgical | IOL pipeline Unmet needs limiting adoption of Advanced Technology IOLs (ATIOLs) Significant opportunity to Patient awareness & education increase ATIOL penetration ATIOL penetration Surgeon confidence ~30-40% in consistently brilliant outcomes 1 point global 19% penetra
Slide 49: Surgical | IOL pipeline
INTRAOCULAR LENSES Surgical | IOL pipeline Best-in-class science to drive penetration and share in ATIOLs Best material Best delivery systems Best optics CLAREON PCIOL expanding AUTONOME preloaded delivery Next-gen PANOPTIX to improve footprint into additional key device expanding offerings to range
Slide 50: Surgical | Emerging businesses
EMERGING BUSINESSES Surgical | Emerging businesses Significant runway to capture share in large, global markets Refractive Surgical glaucoma ~$1.5B ~$0.6B PRK Refractive Surgical glaucoma Ref. Lens Exchg market expected market expected to to grow to grow to Phakic IOL MIGS (implant) Lenticular extra
Slide 51: Surgical | Refractive
EMERGING BUSINESSES Surgical | Refractive Fully-personalized WAVELIGHT INNOVEYES procedure unlocks potential for outcomes beyond 20/20 Outstanding outcomes1 % patients achieving uncorrected distance visual acuity at 3 months 98% 100% 97% 93% 94% 83% 83% 69% 45% 40% 32% INNOVEYES 0% Unique LASIK trea
Slide 52: Surgical | Surgical glaucoma
EMERGING BUSINESSES Surgical | Surgical glaucoma HYDRUS Microstent provides a strong anchor in surgical glaucoma with continued runway Clinically advantaged HYDRUS HYDRUS expansion Only MIGS device to report clinical results from a pivotal trial at 5 years Upcoming launches… 66% >50% 5 year of patie
Slide 53: Surgical | Growth outlook
Surgical | Growth outlook Future growth driven by new product launches Net Sales1 Select new product launches (Alcon Surgical) Next-gen UNITY VCS UNITY DX consumables UNITY CS $5.0B Driven by trade-up to CLAREON AUTONOME & Next-Gen new products PCIOLs TRUEGLIDE PANOPTIX 2022 Base New product 2027 bu
Slide 54: Surgical | Summary
Surgical | Summary Alcon well positioned for continued success Robust equipment • Largest equipment installed base in ophthalmology, with ~40K footprint active cataract, vit-ret, and refractive consoles placed globally Recurring revenue • #1 share of phaco and vit-ret equipment and consumables strea
Slide 55: Growing in contact lenses
Growing in contact lenses Max Wolf VP & General Manager, Contact Lenses Some products discussed may not be approved for sale or use.
Slide 56: Vision Care | Overall market
Vision Care | Overall market Vision Care market continues to grow at ~4%, Alcon has a strong position 2022 Global Vision Care Sales1 2022 Industry Sales1 Industry CAGR1 $B $B %, 2022-2027E Others ~$3.6 Contact Lens $10 ~5% ~$20B OTC Pharma market Ocular Health $7 $3 ~3% Vision Care $20 ~4% 1. Alcon
Slide 57: Contact Lens | Market dynamics
Contact Lens | Market dynamics Contact lens market growth is partly driven by specialty lenses and a shift towards dailies Unit market as defined by Retail market by type ($) Retail market by modality ($) monthly EQ (MEQ)1 by modality 5% CAGR 1% CAGR 5% CAGR (2018 – 2022) (2018 – 2022) (2018 – 2022)
Slide 58: Contact Lens | Recent performance
Contact Lens | Recent performance Innovation driving market share gains in key segments ALC global daily sphere ALC global contact lens market share evolution1 contact lens market share evolution3 ~120 basis points of share growth3 ~250 basis points of share growth3 ~25%3 ALC global daily toric cont
Slide 59: Contact Lens | Short-term focus areas
Contact Lens | Short-term focus areas Comprehensive and complete portfolio, manufacturing efficiency and novel innovation 1 2 3 Building the most Driving Continuing to lead comprehensive manufacturing with novel product portfolio efficiencies innovation 59
Slide 60: Contact Lens | Comprehensive and complete portfolio
COMPREHENSIVE PORTFOLIO Contact Lens | Comprehensive and complete portfolio Completing contact lens family with the best technology and maximizing growth Q4 2012 Q4 2022 Q3 2021 Q4 2019 Q3 2016 Q1 2021 Q1 2022 2023-2025 TOTAL30 family: DAILIES TOTAL1 family: PRECISION1 family: sphere, toric, multifo
Slide 61: Contact Lens | Flexibility in manufacturing asset base
MANUFACTURING EFFICENCIES Contact Lens | Flexibility in manufacturing asset base Unparalleled manufacturing flexibility enables strategic competitive advantages High flexibility and Better long-term economics1 competitive innovation cycles Next innovation Overall equipment effectiveness4 Unit cost p
Slide 62: Contact Lens | PRECISION7
NOVEL INNOVATION Contact Lens | PRECISION7 New 1-week lens Reusable 1-week lens New chemistry New lens wear modality For wearers that benefit from: • Easier replacement schedule • A fresh new lens more often Comfort all week 62
Slide 63: Contact Lens | PRECISION7
NOVEL INNOVATION Contact Lens | PRECISION7 The only lens with ActivFlo re-wetting system for clear vision and outstanding comfort ActivFlo system Enhanced edge design 63
Slide 64: Market share opportunity in reusable segment
NOVEL INNOVATION Contact Lens | PRECISION7 Market share opportunity in reusable segment 2022 sell-in by modality1 Leading Alcon products: ~$10B, annualized Alcon share % Premium segment Mainstream segment Daily Disposable ~29% Dailies ~60% Reusables ~25% Monthly ~21% ~15% 2-Weekly 2022 1 point of sh
Slide 65: Expanding in ocular health
Expanding in ocular health Jonathan Balch VP & General Manager, Ocular Health Some products discussed may not be approved for sale or use.
Slide 66: Ocular Health | Portfolio and market opportunity
Ocular Health | Portfolio and market opportunity Drive growth through continuous innovation 2022 Global Ocular Health Sales Artificial Tears Allergy Other OH OTC2 $1.6B Artificial Tears $3.3B ~25% ~35% ~$10B ALC’s global market share US allergy market share for Pataday family market $0.6B Contact le
Slide 67: Ocular Health | Focus areas
Ocular Health | Focus areas Our near-term focus areas seek a path to sustainable growth 1 2 3 Systane Pharma Launch Novel Dry Growth Re-entry Eye Rx 67
Slide 68: Ocular Health | Systane
SYSTANE GROWTH Ocular Health | Systane Since 2021 we’ve launched Systane MDPF products in 40+ markets globally Number of 2021 2022 Artificial tears annual growth trend Launch Markets $ share US ~7% CAGR (US) Europe1 Systane 37 41 2019-2022 Ultra MDPF Preserved Unit-Dose 1 point of US MDPF 1% Preserv
Slide 69: Ocular Health | Systane Complete + HA
SYSTANE GROWTH Ocular Health | Systane Complete + HA Combined strength of Systane Complete nano-lipids and hyaluronic acid in one dose Insufficient symptom relief in any one Unmet Need eye drop product Combined nano-lipids and hyaluronic Complete + HA acid provide relief from more severe dry eye sym
Slide 70: Pharmaceuticals | Strategic intent
PHARMA RE-ENTRY Pharmaceuticals | Strategic intent Strategic intent to re-establish Alcon as an industry leader Alcon’s Right to Win Fragmented Natural Deep Ophtha Market Aggregator Expertise • Many assets <$1B: too small for • Largest & best capitalized with • Strong R&D and formulation “Big Pharma
Slide 71: Pharmaceuticals | Dry eye disease: ~$1.6B US market
NOVEL DRY EYE RX Pharmaceuticals | Dry eye disease: ~$1.6B US market1 Opportunity to grow share with a differentiated product • Significant need for an effective chronic treatment that THE PROBLEM can provide rapid tear production and better relief of dry eye disease symptoms • OTC artificial tears,
Slide 72: AR-15512 phase 2 results are promising
NOVEL DRY EYE RX Pharmaceuticals | AR-15512 phase 2 results are promising AR-15512 demonstrated strong results on both signs and symptoms of dry eye % Responders (>10mm): Symptoms: Unanesthetized Schirmer score SANDE score * p < 0.0001 Change * p < 0.0001 -2.9 from -5.9 -7.4 -5.0 * p < 0.0001 baseli
Slide 73: AR-15512 phase 3 timeline
NOVEL DRY EYE RX Pharmaceuticals | AR-15512 phase 3 timeline 2024 2023 COMET 2 Phase 3 data readout COMET 3 NDA package filing Phase 3 data readout COMET-2, COMET-3, COMET-4 COMET 4 Phase 3: safety study (6-month data readout) DIFFERENTIATED CHARACTERISTICS • First-in-class product candidate to trea
Slide 74: Vision Care | Growth outlook
Vision Care | Growth outlook Future growth driven by new product launches Net Sales1 (Alcon Vision Care) Select new product launches Contact lenses $3.6B Ocular health + HA 2022 Base New product 2027 business launches2 1. 5-year outlook is subject to various risks and uncertainties. See safe harbor
Slide 75: Vision Care | Summary
Vision Care | Summary Alcon well positioned for continued success across contact lens and ocular health Continued CL growth • Innovation to drive growth in the next 5 years, through recent and driven by innovation upcoming product launches • Targeted investment in fast-growing market segments Maximi
Slide 76: Innovating for the future
Innovating for the future Ian Bell President, Global Business & Innovation Some products discussed may not be approved for sale or use.
Slide 77: Innovation | Our strategic approach
Innovation | Our strategic approach Using superior expertise to build a rich pipeline of internal and external assets Deep World-class Balanced Agnostic to understanding of expertise Innovation internal versus eye care needs portfolio external Global Technical Incremental Active BD&L market leadersh
Slide 78: Innovation | Investments in R&D and product development
Innovation | Investments in R&D and product development 37 23 $3.1B Surgical Vison Care Core R&D3 launches1 launches1 investment since since 2018 2018 since 2018 since 2018 since in 2018 2020 versus 2018 JP MORGAN HEALTHCARE CONFERENCE 1,600 ˜ 2.1K 100+ R&D Active patent Active associates families2
Slide 79: Innovation | Focusing on productivity
Innovation | Focusing on productivity Establish the New Alcon Accelerate Innovation Unleashing R&D’s potential 2019-2020 2019-2021 2022+ Organization Process External Modernization Structure Excellence Ideation Embracing a digital Shifting to a more Building a faster, Partnering to and data analytic
Slide 80: Innovation | Long-term focus areas
Innovation | Long-term focus areas Combining technical expertise across Surgical and Vision Care domains Surgical Vision Care 1 2 3 4 5 Cataract Refractive Specialty OTC Rx Contact Lenses Dry Eye Pharma 80
Slide 81: Disruptive ATIOLs
CATARACT Disruptive ATIOLs Advancing our accommodating IOL program | Duration of accommodation Key accomplishments % of subjects achieving functional vision2,3 Distance 100 100 100 Vision Inter- 96 96 mediate 60 Visual acuity maintained at all distances in 2-4 year Near 80 86 follow-up study1 Vision
Slide 82: Disruptive ATIOLs
CATARACT Disruptive ATIOLs Advancing our accommodating IOL program | Combining accommodating and tunable Key accomplishments Combined accommodating and ... and iterated design, materials and tuning procedure to tunable technologies ... achieve +/- 2D of adjustment range1 Accommodating Tunability dio
Slide 83: Equipment ecosystem
REFRACTIVE Equipment ecosystem Expanding our equipment ecosystem to support refractive applications Refractive Refractive Clinic Operating Room Cat/vit consoles & consumables UNITY VCS/CS CENTURION, LEGION, Office CONSTELLATION diagnostics SMART UNITY DX Solutions ARGOS Cloud-based Digital platform
Slide 84: Next generation laser platform
REFRACTIVE Next generation laser platform Next generation combination laser replaces need for two platforms • Full range solution in an integrated, user-centric design • Combines flap cutting and excimer laser treatment • Delivers various treatment modalities to meet patient needs • Enhances patient
Slide 85: Presbyopia
SPECIALTY CONTACT LENSES Presbyopia Presbyopia is a universal challenge and a multi-billion dollar opportunity 80+% 3-4% Percentage of Penetration of people 45-55 multifocal contacts have since presbyopia1 2018 today since 2018among US presbyopes2 ~$1B $3B+ Current global Global market market for ex
Slide 86: Presbyopia
SPECIALTY CONTACT LENSES Presbyopia We have the technology knowhow to deliver a better solution for presbyopia Current Limitations of Multifocal Our Approach Contact Lenses Visual outcomes Fitting experience Applying Alcon’s Multiple can be improved can be improved optical expertise programs under (
Slide 87: Astigmatism
SPECIALTY CONTACT LENSES Astigmatism Astigmatism correction remains underpenetrated among contact lens wearers Astigmatism prevalence Astigmatism correction % of eyes remains underpenetrated • Only a fraction of contact Population1 41 lens wearers with astigmatism are wearing toric lenses • Chair ti
Slide 88: Astigmatism
SPECIALTY CONTACT LENSES Astigmatism We are designing next generation lenses that simplify astigmatism correction for ECPs Lowering inventories while Easier to fit More stable on eye increasing availability • Quicker and simpler to fit • Reducing vision fluctuation • Reduces SKUs required to vs. cur
Slide 89: Next generation tear therapy
DRY EYE OTC Next generation tear therapy Next phase of innovation for artificial tears Residence time1 • Agents with longer Simulated blink (cycles) lasting duration Unmet need • Lower dosing schedules (e.g., 1 drop for 24-hour relief) 200%+ • Targeting longer lasting Next relief with increased gene
Slide 90: Next generation tear therapy
DRY EYE OTC Next generation tear therapy Mucin interaction chemistries increase retention time providing prolonged ocular surface protection CONTROL NEXT GEN 0 cycles 1,000 cycles 0 cycles 1,000 cycles % cells free from damage/detachment1 % cells free from damage/detachment1 -94% -3% 100 100 97 6 0
Slide 91: Pipeline focus
PHARMA Pipeline focus We continue to build our pharma pipeline focusing on promising and large categories Glaucoma (~$3.2B market) Lifecycle management We continue to look for: (e.g., reformulation) • External assets - Typically with proof-of-concept Rx dry eye AR-155121 established (phase 2 or 3) (
Slide 92: Delivery
PHARMA Delivery PRINT® technology offers a flexible platform for delivering small molecules Inflammation/ Delivery Glaucoma Rx Dry Eye Wet AMD Redness platforms PRINT ® Delivery Sustained anti-VEGF activity Technology for 12 months Leakage score (rabbit) Small molecule platform addresses wide array
Slide 93: Long-term Innovation | Summary
Long-term Innovation | Summary Rich pipeline of early-stage innovation driving our future growth potential Innovation • World-class technical capability, knowledge estate and capacity understanding of eye care needs • Continuing efficiency gains with modernization and digital Surgical • Advancing di
Slide 94: Appendix
Alcon Appendix
Slide 95: 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, compound annual growth rates and free cash flow. Because of t
Slide 96: 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 97: Non-IFRS financial measures
Non-IFRS financial measures Core operating margin at constant currency Alcon calculates Core operating margin at constant currency by translating the foreign currency for the period presented for sales and other income statement items into US dollars consistent with our constant currency methodology
Slide 98: Reconciliation of IFRS to Core results
Reconciliation of IFRS to Core results Amortization of IFRS certain intangible Separation Other Core ($ millions) Results assets(1) Impairments(2) costs(3) items(4) results 2018 Research and development (587) 11 — — 47 (529) 2019 Research and development (656) 33 — 4 35 (584) 2020 Research and devel
Slide 99: Reconciliation of IFRS to Core results
Reconciliation of IFRS to Core results Core as a IFRS Percent of Amortization of certain Separation Other percent of ($ millions) Results Sales intangible assets(1) Impairments(2) costs(3) items(4) Core results Sales 2019 Net sales 7,362 — — — — 7,362 Research and development (656) 8.9% 33 — 4 35 (5
Slide 100: Reconciliation of IFRS to Core results
Reconciliation of IFRS to Core results ($ millions, except %) 2019 % of sales 2020 % of sales 2021 % of sales 2022 % of sales Net sales to third parties $7,362 6,763 8,222 8,654 Operating (loss)/income and margin (187) (2.5%) (482) (7.1%) 580 7.1% 672 7.8% (1) Amortization of certain intangible asse
Slide 101: Reconciliation of Free cash flow to Net cash flows from operating activities
Reconciliation of Free cash flow to Net cash flows from operating activities ($ millions) 2022 Net cash flows from operating activities 1,217 Purchase of property, plant & equipment (636) Free cash flow 581 101
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 COI Core operating income COM Core operating margin EDOF (or EDF) Extended Depth of Focus EMR Electronic Medical Record F