Slide 1: Q4 and Full Year 2023 Earnings Presentation
Q4 and Full Year 2023 Earnings Presentation February 28, 2024 1
Slide 2: Safe harbor
Safe harbor 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 statements
Slide 3: Agenda
Agenda 01 Key topics 02 Sales 03 IFRS results 04 Core results 05 Outlook 3
Slide 4: Sales
Agenda 01 Key topics 02 Sales 03 IFRS results 04 Core results 05 Outlook 4
Slide 5: 2023 Highlights
2023 Highlights 1 • FY23 sales of $9.4B, up 8%, or 10% cc • FY23 operating margin of 11.1%; core operating 1 margin of 19.7% 1 • FY23 diluted EPS of $1.96, up 188%, or 241% cc 1 • FY23 core diluted EPS of $2.74, up 22%, 1 or 33% cc • Generated $1.4 billion of cash from operating 1 activities and $73
Slide 6: Select financial highlights
Select financial highlights 1 rd 1 4Q23 Sales of $2.3B, up 8%, or 10% cc 3 party sales Core operating margin 4Q23 Operating margin of 8.9%, up 790 4Q23 $2.3B 4Q23 18.9% 1 basis points (bps) y/y; up 930 bps cc 4Q23 Core operating margin of 18.9%, 4Q22 $2.2B 4Q22 16.4% 1 up 250 bps, or up 360 bps cc 4
Slide 7: Sales
Agenda 01 Key topics 02 Sales 03 IFRS results 04 Core results 05 Outlook 7
Slide 8: FY 2023 Product mix
1 FY 2023 Product mix Vision Care $4.1B (43%) Surgical $5.3B (57%) Ocular health (41%) Implantables (32%) Dry eye products Monofocal IOLs Allergy eye drops Advanced technology IOLs Steroid eye drops Glaucoma implants Glaucoma eye drops $9.4 billion Contact lens care Consumables (51%) Dedicated consu
Slide 9: Q4 2023 Surgical Net Sales
Q4 2023 Surgical Net Sales 1 (USD) (CC) Surgical growth driven by international markets (USD $M) $1,274 $1,352 6% 8% $438 • Implantables growth led by demand for advanced technology $434 1% 5% + intraocular lenses in international markets • Continued ATIOL global and US market leadership • Consumabl
Slide 10: Q4 2023 Vision Care Net Sales
Q4 2023 Vision Care Net Sales Double-digit Vision Care growth reflects strength across (USD $M) (USD) (CC)1 the franchise, including acquired products, and pricing $881 $980 11% 13% • Product innovation drove strong demand for contact lenses, including + sphere and toric product launches • Price inc
Slide 11: IFRS results
Agenda 01 Key topics 02 Sales 03 IFRS Results 04 Core results 05 Outlook 11
Slide 12: Q4 2023 IFRS results
Q4 2023 IFRS results 1 Worldwide net sales Operating margin Diluted EPS $2.3B $0.86 8.9% $2.2B 1.0% ($0.20) 4Q22 4Q23 4Q22 4Q23 4Q22 4Q23 Y/Y change (USD): +8% +790 bps 12 1. 4Q22 included legal settlement costs and the tax impact of an Advanced Pricing Agreement. 4Q23 includes a tax benefit of $263
Slide 13: FY 2023 IFRS results
FY 2023 IFRS results 1 Worldwide net sales Operating margin Diluted EPS $9.4B $8.7B 11.1% $1.96 7.8% $0.68 FY22 FY23 FY22 FY23 FY22 FY23 Y/Y change (USD): +8% +330 bps +188% 13 1. FY22 included legal settlement costs and the tax impact of an Advanced Pricing Agreement. FY23 includes a tax benefit of
Slide 14: Q4 2023 IFRS operating margin bridge
Q4 2023 IFRS operating margin bridge 4Q23 vs. 4Q22, % of net sales 10.3 5.5 8.9 (1.4) 1.8 0.4 1.6 1.0 4Q22 Gross SG&A R&D Other income/ Foreign 4Q23 Margin expense 1 Exchange 14 1. Other income and expense in 4Q22 included legal settlement costs, higher transformation and acquisition and integration
Slide 15: FY 2023 IFRS operating margin bridge
FY 2023 IFRS operating margin bridge FY23 vs. FY22, % of net sales 12.5 1.8 11.1 1.6 (1.4) 1.8 (0.5) 7.8 FY22 Gross SG&A R&D Other income/ Foreign FY23 1 Margin expense Exchange 15 1. Other income and expense in FY22 included legal settlement costs. Other income and expense in FY23 included a benefi
Slide 16: Core results
Agenda 01 Key topics 02 Sales 03 IFRS results 04 Core results 05 Outlook 16
Slide 17: Q4 2023 Core results
1 Q4 2023 Core results Worldwide net sales Core operating margin Core diluted EPS $2.3B 18.9% $2.2B $0.70 16.4% $0.42 4Q22 4Q23 4Q22 4Q23 4Q22 4Q23 Y/Y change (cc): +10% +360 bps +78% 1. Core operating margin, core diluted EPS, and constant currency growth, including FX impacts, are non-IFRS measure
Slide 18: FY 2023 Core results
1 FY 2023 Core results Worldwide net sales Core operating margin Core diluted EPS $9.4B $2.74 $8.7B 19.7% 18.2% $2.24 FY22 FY23 FY22 FY23 FY22 FY23 Y/Y change (cc): +10% +280 bps +33% 18 1. Core operating margin, core diluted EPS, and constant currency growth, including FX impacts, are non-IFRS meas
Slide 19: Q4 2023 Core operating margin bridge
1 Q4 2023 Core operating margin bridge 4Q23 vs. 4Q22, % of net sales 0.3 20.0 0.4 1.7 18.9 (1.1) 1.2 16.4 4Q22 Gross Margin SG&A R&D Other income/ Foreign 4Q23 expense Exchange Key drivers • Improved underlying operating leverage from higher sales, including price increases and manufacturing efficie
Slide 20: FY 2023 Core operating margin bridge
1 FY 2023 Core operating margin bridge FY23 vs. FY22, % of net sales 1.6 21.0 0.2 (0.5) 19.7 1.5 (1.3) 18.2 FY22 Gross Margin SG&A R&D Other income/ Foreign FY23 expense Exchange Key drivers • Improved underlying operating leverage from higher sales, including price increases and manufacturing effic
Slide 21: FY 2023 Cash flow and balance sheet highlights
FY 2023 Cash flow and balance sheet highlights Cash and cash equivalents $1.1 billion FY23 cash flows from operations $1.4 billion 1 FY23 free cash flow $730 million Capex $658 million Investments in new contact lens manufacturing capacity Debt $4.7 billion No financial covenants 21 1. Free cash flo
Slide 22: Outlook
Agenda 01 Key topics 02 Sales 03 IFRS results 04 Core results 05 Outlook 22
Slide 23: FY 2024 Outlook
FY 2024 Outlook 2024 outlook February Net sales (USD) $9.9 to $10.1 billion 1 Change vs. prior year (cc) +6% to +8% (non-IFRS measure) 1 Core operating margin 20.5% to 21.5% (non-IFRS measure) 2 Interest expense and OFI&E $190 to $210 million 3 Core effective tax rate ~20% (non-IFRS measure) 1 Core
Slide 24: Appendix
Appendix 24
Slide 25: Non-IFRS measures as defined by the Company
Appendix: Non-IFRS measures as defined by the Company Alcon uses certain non-IFRS metrics when measuring performance, including when measuring current period results against prior periods, including core results, percentage changes measured in constant currencies and free cash flow. Because of their
Slide 26: Reconciliation of IFRS to core results, Q4 2023
Reconciliation of IFRS results to core results (non-IFRS measure) Three months ended December 31, 2023 Core Amortization of results IFRS certain intangible Transformation Other (non-IFRS (1) (3) (5) ($ millions except earnings per share) results assets costs items measure) Gross profit 1,290 164 — (
Slide 27: Reconciliation of IFRS to core results, Q4 2022
Reconciliation of IFRS results to core results (non-IFRS measure) Three months ended December 31, 2022 Core Amortization of results IFRS certain intangible Transformation Legal Other (non-IFRS (1) (2) (3) (4) (5) ($ millions except (loss)/earnings per share) results assets Impairments costs Items it
Slide 28: Reconciliation of IFRS to core results, FY 2023
Reconciliation of IFRS results to core results (non-IFRS measure) Twelve months ended December 31, 2023 Core Amortization of results certain intangible Transformation Other (non-IFRS (1) (3) (5) ($ millions except earnings per share) IFRS results assets costs items measure) Gross profit 5,247 663 —
Slide 29: Reconciliation of IFRS to core results, FY 2022
Reconciliation of IFRS results to core results (non-IFRS measure) Twelve months ended December 31, 2022 Amortization Core of certain Transfor- results IFRS intangible mation Legal Other (non-IFRS (1) (2) (3) (4) (5) ($ millions except earnings per share) results assets Impairments costs items items
Slide 30: Explanatory footnotes to IFRS to core reconciliation
Reconciliation of IFRS results to core results (non-IFRS measure) 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) Transformation costs, pri
Slide 31: Explanatory footnotes to IFRS to core reconciliation
Reconciliation of IFRS results to core results (non-IFRS measure) Explanatory footnotes to IFRS to core reconciliation tables (6) For the three months ended December 31, 2023, total tax adjustments of $314 million include tax associated with operating income core adjustments and discrete tax items.
Slide 32: Reconciliation of free cash flow
Reconciliation of free cash flow (non-IFRS measure) The following is a summary of free cash flow for the twelve months ended December 31, 2023 and 2022, together with a reconciliation to net cash flows from operating activities, the most directly comparable IFRS measure: ($ millions) 2023 2022 Net c
Slide 33: Alcon
Alcon SEE BRILLIANTLY