1Q19 Trading Update 1Q19 ading Update May 16, 2019 1
Legal Disclaimers Legal Disclaimers Forward-Looking Statements This presentation contains “forward - looking statements” within the meaning of the safe harbor provisions of the United States Pr ivate Securities Litigation Reform Act of 1995. Forward- looking statements can be identified by words such as: “anticipate,” “intend,” “commitment,” “look forward,” “maintain,” “plan,” “goal,” “seek,” “believe,” “project,” “estimate,” “expect,” “strategy,” “future,” “likely,” “may,” “should,” “will” and similar references to future periods. Forward -looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on Alcon’s current beliefs, expectations and assumptions regarding the future of it s business, future plans and strategies, and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties and risks that are difficult to predict. Such forward-looking statements are subject to various risks and uncertainties facing Alcon, including: the commercial success of its products and its ability to maintain and strengthen its position in its markets; the success of its research and development efforts; uncertainties regarding the success of Alcon’s separation and spin -off from Novartis; pricing pressure from changes in third party payor coverage and reimbursement methodologies; global economic, financial, legal, tax, political, and social change; ongoing industry consolidation; its ability to maintain relationships in the healthcare industry; changes in inventory levels or buying patterns of its customers; its reliance on sole or limited sources of supply; its reliance on outsourcing key business functions; its ability to protect its intellectual property; the impact on unauthorized importation of its products from countries with lower prices to countries with higher prices; its success in completing and integrating strategic acquisitions; the effects of litigation, including product liability lawsuits; its ability to comply with all laws to which it may be subject; effect of product recalls or voluntary market withdrawals, including CyPass; data breaches; the implementation of its enterprise resource planning system; its ability to attract and retain qualified personnel; the sufficiency of its insurance coverage; the accuracy of its accounting estimates and assumptions, including pension plan obligations and the carrying value of intangible assets; the ability to obtain regulatory clearance and approval of its products as well as compliance with any post-approval obligations; legislative and regulatory reform; the ability of Alcon Pharmaceuticals Ltd. to comply with its investment tax incentive agreement with the Swiss State Secretariat for Economic Affairs in Switzerland and the Canton of Fribourg, Switzerland; ability to service its debt obligations; the need for additional financing; its ability to operate as a stand-alone company; whether the transitional services Novartis has agreed to provide Alcon are sufficient; the impact of the spin- off from Novartis on Alcon’s shareholder ba se; the ability to declare and pay dividends; and the effect of maintaining or losing its foreign private issuer status under U.S. securities laws. Additional factors are discussed in Alcon’s filings with the United States Securities and Exchange Commission, including its Form 20-F. Should one or more of these uncertainties or risks materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated. Therefore, you should not rely on any of these forward-looking statements. Forward-looking statements speak only as of the date of its filing, and Alcon assumes no obligation to update forward-looking statements as a result of new information, future events or otherwise. Intellectual property This report may contain reference to our proprietary intellectual property. All product names in this presentation are trademarks owned by or licensed to Alcon. Non-IFRS Measures Alcon uses certain non-IFRS metrics when measuring performance, especially when measuring current period results against prior periods, including core results and constant currencies. Because of their non-standardized definitions, the non-IFRS measures (unlike IFRS measures) may not be comparable to the calculation of similar measures of other companies. These non-IFRS measures are presented solely to permit investors to more fully understand how Alcon management assesses underlying performance. These non-IFRS measures are not, and should not be viewed as, a substitute for IFRS measures. 2
Age Agenda nda Highlights Select financial results 2019 guidance 3
Highlights Highl ights 4
Su Successful ccessful spin spin-of off • Alcon became an independent public company on April 9, 2019 and started trading under the ticker ALC • Swiss SIX exchange and the NYSE listing • Alcon is domiciled in Switzerland • Included in 14 global and regional indices 5
Alcon Alco n at at a Gl a Glance ance $7b $23b sales market favorable market trends with significant opportunities growing eye care device leader growing at 4% to grow and expand # 1 or # 2 140+ in all categories within countries served by over strong & experienced Surgical & Vision Care 20,000 employees management team 6
St Stron ong g mega mega-tr trends ends Myopia prevalence is Aging population Increasing wealth growing; increased Innovation improving with growing eye care and growth from screen time and mobile the quality of eye care needs emerging economies device use is impacting vision Population over age 60 Patients have more Middle class will grow By 2050, half the world, will double by 2050 options and by ~ 1.5b people in the ~ 5b people , ( >1b people ) 1 next 10-15 years 2 will be myopic 3 better outcomes 1. United Nations (UN), http://www.un.org/en/sections/issues-depth/ageing/ 2. The unprecedented expansion of the global middle class an update, Kharas 2017 3. Global Prevalence of Myopia and High Myopia and Temporal Trends from 2000 through 2050, Holden, Brien A. et al., Ophthalmology , Volume 123 , Issue 5 , 1036 - 1042 7
Our five-year Our five year str strategy ategy sets sets us up fo us up for r sustainable susta inable and pr and profita ofitable ble gr growth wth ... ... Maximize the potential of near-term portfolio by growing key products Accelerate innovation and deliver next wave of technologies Capture opportunities to expand markets and pursue adjacencies Support new business models to improve the customer experience Leverage existing infrastructure to improve operating efficiencies 8
Advancing Advancing our our inno innovat vation ion agenda agenda PowerVision iLux and NGenuity New accommodating AT-IOL technology iLux: Device for treating Meibomian Gland • • Dysfunction (MBG), a leading cause of dry eye Fluid filled lens uses natural contraction of • eye muscles Advancing development of potentially NGenuity: 3D heads-up digital visualization • • breakthrough technology system that expands the view of the surgical field Acquisition completed 3/19 • 9
Select Financial Select Financi al Results Results 10
Diversified portfolio across businesses and geographies Gl Globa obal l sal sales in 20 es in 2018 18 Surgical $4.0B Vision Care $3.1B U.S. $2.9B 16% Implantables 41% 27% Contact Lenses $7.1B $7.1B 31% 17% Consumables Ocular 59% Health 9% Equipment / Other International $4.2B Numbers are rounded for presentation purposes 11
Diversified portfolio across businesses and geographies Global sales in 1Q19 Surgical $1.0B Vision Care $0.8B U.S. $0.8B 16% 28% 41% Implantables Contact Lenses $1.8B $1.8B 31% 16% Consumables Ocular 59% Health 9% Equipment/ Other International $1.0B Numbers are rounded for presentation purposes 12
1Q19 details by franchise and product category Surgical Vision Care Contact Lenses Implantables Daily lenses • 30% 65% Monofocal Intra-ocular lenses • Reusable lenses • Advanced technology IOLs • Cosmetic lenses • Consumables Ocular Health Dedicated consumables Dry eye products • • 55% 35% Custom surgical packs Contact lens solution • • Procedural products • Equipment/Other Cataract equipment (Centurion) • Retinal equipment (Constellation) • 15% Refractive Lasik equipment • Diagnostic and visualization • Equipment service • Numbers are rounded for presentation purposes 13
1Q19 net sales at a glance Net Sales (USD $M) $1,779 $1,777 • Flat reported net sales vs prior year • +4% 1 constant-currency growth -400 bps foreign currency • impact due to the strengthening US dollar 1Q18 1Q19 1Constant currencies (cc) are a non-IFRS measure. Growth in constant currency (cc) is calculated by translating the current yea r’s foreign currency items into US dollars using average exchange rates from the prior year and comparing them to prior year values in US dollars. An explanation of non-IFRS measures can be found in the appendix. 14
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