- Third quarter 2022 sales of $2.1 billion, up 2%, or 9%
constant currency (cc)
- Third quarter 2022 earnings were $0.23 per diluted share;
core earnings of $0.50 per diluted share, down 7%, or up 14%
cc
- Updated 2022 outlook reflects strong sales growth and
operational leverage, negatively impacted by strong US
dollar
Ad Hoc Announcement Pursuant to Art. 53 LR
Alcon (SIX/NYSE:ALC), the global leader in eye care, reported
its financial results for the three and nine months ended September
30, 2022. For the third quarter of 2022, sales were $2.1 billion,
an increase of 2% on a reported basis and 9% on a constant currency
basis(2), as compared to the same quarter of the previous year.
Alcon reported diluted earnings per share of $0.23 and core diluted
earnings per share of $0.50.
Third quarter and nine months 2022 key figures
Three months ended September
30
Nine months ended September
30
2022
2021
2022
2021
Net sales ($ millions)
2,124
2,084
6,499
6,088
Operating margin (%)
9.7%
1.0%
10.0%
6.5%
Core operating margin (%)(1)
17.2%
17.7%
18.7%
18.0%
Diluted earnings per share ($)
0.23
0.00
0.87
0.48
Core diluted earnings per share ($)(1)
0.50
0.54
1.82
1.60
“Our third quarter results reflect the continued strong
operational performance of the business in an extremely challenging
macroeconomic environment," said David J. Endicott, Alcon's Chief
Executive Officer. "Demand for our products was robust, and we saw
particularly strong growth in our international markets.”
Mr. Endicott continued, “We have built a solid foundation and
our business fundamentals are strong. Our positive results
demonstrate that our investments in transformation, infrastructure
and innovation continue to pay off. We are pleased with our margin
expansion and operating leverage, despite the headwinds of a strong
US dollar. Looking forward, we will continue to focus on advancing
our innovation engine, driving commercial execution and creating
long-term shareholder value."
Third quarter 2022 results
Sales for the third quarter of 2022 were $2.1 billion, an
increase of 2% on a reported basis and 9% on a constant currency
basis, compared to the third quarter of 2021. Sales benefited from
continued recovery across international markets and product
innovation, but were negatively impacted by foreign currency.
The following table highlights net sales by segment for the
third quarter and first nine months of 2022:
Three months ended September
30
Change %
Nine months ended September
30
Change %
($ millions unless indicated
otherwise)
2022
2021
$
cc(2)
2022
2021
$
cc(2)
Surgical
Implantables
392
375
5
11
1,291
1,106
17
23
Consumables
618
594
4
11
1,863
1,749
7
12
Equipment/other
206
192
7
15
617
589
5
10
Total Surgical
1,216
1,161
5
12
3,771
3,444
9
15
Vision Care
Contact lenses
558
562
(1
)
7
1,662
1,606
3
10
Ocular health
350
361
(3
)
2
1,066
1,038
3
6
Total Vision Care
908
923
(2
)
5
2,728
2,644
3
8
Net sales to third parties
2,124
2,084
2
9
6,499
6,088
7
12
Surgical growth driven by improvements across international
markets
Surgical net sales of $1.2 billion, which include implantables,
consumables and equipment/other, increased 5%, or 12% on a constant
currency basis, compared to the third quarter of 2021. Implantables
sales reflected improving conditions in international markets,
including increased demand for Vivity, and sales of the Hydrus
Microstent following the recent acquisition of Ivantis, partially
offset by declines in advanced technology intraocular lenses in
South Korea following a reimbursement change during the first
quarter. Consumables growth was primarily driven by improving
conditions across international markets and continued strength in
cataract consumables in the United States. Growth in
equipment/other was primarily driven by strong demand in
international markets for cataract equipment and service. There was
a negative 7 percentage point impact on Surgical sales from
currency.
For the nine months ended September 30, 2022, Surgical net sales
increased 9%, or 15% on a constant currency basis, versus the nine
months ended September 30, 2021.
Vision Care benefited from silicone hydrogel contact lenses and
Systane artificial tears, significantly offset by supply chain
challenges in contact lens care
Vision Care net sales of $0.9 billion, which include contact
lenses and ocular health, decreased 2%, or increased 5% on a
constant currency basis, compared to the third quarter of 2021.
Contact lens sales reflected growth on a constant currency basis,
led by silicone hydrogel contact lenses, including our Precision1
and Total families of products. Ocular health sales decreased 3%,
or increased 2% on a constant currency basis, led by Systane and
international markets, significantly offset by supply chain
challenges, primarily in contact lens care. There was a negative 7
percentage point impact on Vision Care sales from currency.
For the nine months ended September 30, 2022, Vision Care net
sales increased 3%, or 8% on a constant currency basis, as compared
to the nine months ended September 30, 2021.
Operating income
Third quarter 2022 operating income was $205 million and
operating margin was 9.7%. Operating margin increased 11.3
percentage points on a constant currency basis as the prior year
was impacted by an impairment of an intangible asset and an
increase in legal items, partially offset by a benefit from fair
value adjustments to contingent consideration liabilities. The
current year period benefited from improved operating leverage from
higher sales and favorability from incentive compensation,
partially offset by increased inflationary impacts. There was a
negative 2.6% impact on operating margin from currency.
Adjustments to arrive at core operating income in the third
quarter of 2022 were $160 million, mainly due to $145 million of
amortization. Excluding these and other adjustments, third quarter
2022 core operating income was $365 million.
Third quarter 2022 core operating margin of 17.2% increased 1.6
percentage points on a constant currency basis, with improved
operating leverage from higher sales and favorability from
incentive compensation partially offset by increased inflationary
impacts. Foreign currency had a negative 2.1% impact on third
quarter 2022 core operating margin.
Operating income for the nine months ended September 30, 2022
was $651 million and operating margin was 10.0%, which increased
5.6 percentage points on a constant currency basis. Adjustments to
arrive at core operating income for the nine months ended September
30, 2022 were $567 million, mainly due to $437 million of
amortization, $61 million of intangible asset impairments and a
legal settlement. Excluding these and other adjustments, core
operating income for the nine months ended September 30, 2022 was
$1.2 billion.
Core operating margin for the nine months ended September 30,
2022 of 18.7% increased 2.4 percentage points on a constant
currency basis versus the prior year period. Foreign currency had a
negative 1.7% impact on the current year period core operating
margin.
Diluted earnings per share (EPS)
Third quarter 2022 diluted earnings per share were $0.23
compared to $0.00 in the prior year period. Core diluted earnings
per share of $0.50 decreased 7%, or increased 14% on a constant
currency basis.
Diluted earnings per share for the nine months ended September
30, 2022 of $0.87 increased 81%, or 146% on a constant currency
basis. Core diluted earnings per share of $1.82 increased 14%, or
32% on a constant currency basis.
Balance sheet and cash flow highlights
The Company ended the first nine months of 2022 with a cash
position of $1.2 billion. Cash flows from operations for the nine
months ended September 30, 2022 totaled $872 million, compared to
cash flows from operations of $958 million in the prior year. The
current year includes increased cash outflows from changes in net
working capital, the timing of tax payments and a legal settlement
payment, partially offset by higher sales.
Free cash flow(3) was $475 million in the first nine months of
2022, compared to $578 million in the previous year. The decrease
in free cash flow was primarily driven by lower cash flows from
operations.
Financial debts totaled $3.9 billion, in line with prior
year-end. The Company ended the third quarter with a net debt(4)
position of $2.7 billion.
Expected acquisition of Aerie Pharmaceuticals, Inc.
On August 22, 2022, Alcon and Aerie Pharmaceuticals, Inc.
announced the companies had entered into a definitive merger
agreement through which Alcon will acquire Aerie.
The purchase price of $15.25 per share represents an equity
value of approximately $770 million. Alcon will also assume net
debt of approximately $160 million for total purchase consideration
of approximately $930 million. The transaction was approved by the
board of directors of each company. The transaction is anticipated
to close in the fourth quarter of 2022, subject to the approval of
Aerie’s shareholders and the satisfaction of customary closing
conditions. During the third quarter, Alcon executed a $900 million
bridge loan facility agreement that is restricted for use in
funding the planned acquisition of Aerie. The bridge loan facility
remained undrawn as of November 15, 2022.
Transformation update
In the fourth quarter of 2019, the Company announced a
multi-year transformation program to drive efficiency gains. The
transformation program was originally projected to deliver annual
run-rate savings of approximately $200 to $225 million, to be
reinvested into key growth drivers. The original projected cost of
the program was approximately $300 million.
The Company has now identified additional transformation
initiatives to deliver incremental efficiencies. As such, the
Company now expects incremental run-rate savings of approximately
$100 million, with incremental program costs of approximately $125
million. The incremental savings will be used to help offset the
negative impacts from macroeconomic headwinds. The Company
continues to expect to complete the program by year-end 2023.
2022 outlook
The Company updated its 2022 outlook as per the table below.
This outlook assumes that the 2022 global market grows at slightly
above historical rates, that inflation stays at current levels
throughout the remainder of the year, that the supply chain does
not materially deteriorate and that the US dollar holds steady at
mid-October 2022 foreign exchange rates. This outlook excludes any
impact from the planned acquisition of Aerie Pharmaceuticals,
Inc.
2022 outlook
as of February
as of May
as of August
as of November
Comments vs. August
Net sales (USD)
$8.7 to $8.9 billion
$8.7 to $8.9 billion
$8.6 to $8.8 billion
$8.5 to $8.7 billion
Decrease
CC net sales growth vs. 2021(2)
+7% to +9%
+9% to +11%
+9% to +11%
+10% to +11%
Tightening of range
Core operating margin(1)
18% to 19%
18% to 19%
18% to 19%
18.0% to 18.5%
Tightening of range
Interest expense and Other financial
income & expense
$180 to $190 million
$200 to $210 million
$210 to $220 million
$210 to $220 million
Maintain
Core effective tax rate(5)
17% to 19%
17% to 19%
17% to 19%
17% to 19%
Maintain
Core diluted EPS(1)
$2.35 to $2.45
$2.35 to $2.45
$2.20 to $2.30
$2.20 to $2.25
Tightening of range
CC core diluted EPS growth vs. 2021(2)
+13% to +18%
+19% to +24%
+19% to +24%
+21% to +24%
Tightening of range
Webcast and Conference Call Instructions
The Company will host a conference call on November 16, 2022 at
2:00 p.m. Central European Time / 8:00 a.m. Eastern Time to discuss
its third quarter 2022 earnings results. The webcast can be
accessed online through Alcon's Investor Relations website,
investor.alcon.com. Listeners should log on approximately 10
minutes in advance. A replay will be available online within 24
hours after the event.
The Company's interim financial report and supplemental
presentation materials can be found online through Alcon's Investor
Relations website at the beginning of the conference, or by
clicking on the link:
https://investor.alcon.com/news-and-events/events-and-presentations/event-details/2022/Alcons-Third-Quarter-2022-Earnings-Conference-Call/default.aspx
Footnotes (pages 1-4)
(1)
Core results, such as core operating
margin and core EPS, are non-IFRS measures. For additional
information, including a reconciliation of such core results to the
most directly comparable measures presented in accordance with
IFRS, see the explanation of non-IFRS measures and reconciliation
tables in the 'Non-IFRS measures as defined by the Company' and
'Financial tables' sections.
(2)
Constant currency (cc) is a non-IFRS
measure. Growth in constant currency (cc) is calculated by
translating the current year’s foreign currency items into US
dollars using average exchange rates from the historical
comparative period and comparing them to the values from the
historical comparative period in US dollars. An explanation of
non-IFRS measures can be found in the 'Non-IFRS measures as defined
by the Company' section.
(3)
Free cash flow is a non-IFRS measure. For
additional information regarding free cash flow, see the
explanation of non-IFRS measures and reconciliation tables in the
'Non-IFRS measures as defined by the Company' and 'Financial
tables' sections.
(4)
Net (debt)/liquidity is a non-IFRS
measure. For additional information regarding net (debt)/liquidity,
see the explanation of non-IFRS measures and reconciliation tables
in the 'Non-IFRS measures as defined by the Company' and 'Financial
tables' sections.
(5)
Core effective tax rate, a non-IFRS
measure, is the applicable annual tax rate on core taxable income.
For additional information, see the explanation regarding
reconciliation of forward-looking guidance in the 'Non-IFRS
measures as defined by the Company' section.
Cautionary Note Regarding Forward-Looking Statements
This press release 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 such as
“anticipate,” “intend,” “commitment,” “look forward,” “maintain,”
“plan,” “goal,” “seek,” “target,” “assume,” “believe,” “project,”
“estimate,” “expect,” “strategy,” “future,” “likely,” “may,”
“should,” “will” and similar references to future periods. Examples
of forward-looking statements include, among others, statements we
make regarding our liquidity, revenue, gross margin, operating
margin, effective tax rate, foreign currency exchange movements,
earnings per share, our plans and decisions relating to various
capital expenditures, capital allocation priorities and other
discretionary items such as our transformation program, market
growth assumptions, our proposed acquisition of Aerie, and
generally, our expectations concerning our future performance and
the effects of the COVID-19 pandemic on our businesses.
Forward-looking statements are neither historical facts nor
assurances of future performance. Instead, they are based only on
our current beliefs, expectations and assumptions regarding the
future of our 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 as: cybersecurity breaches or other
disruptions of our information technology systems; compliance with
data privacy, identity protection and information security laws;
our ability to comply with the US Foreign Corrupt Practices Act of
1977 and other applicable anti-corruption laws, particularly given
that we have entered into a three-year Deferred Prosecution
Agreement with the U.S. Department of Justice; our success in
completing and integrating strategic acquisitions; the completion
of the proposed Aerie transaction on anticipated terms and timing,
including obtaining stockholder and regulatory approvals,
anticipated tax treatment, unforeseen liabilities, future capital
expenditures, revenues, expenses, earnings, synergies, economic
performance, indebtedness, financial condition, losses, future
prospects, business and management strategies for the management
and other conditions to the completion of the transaction; the
possibility that various closing conditions for the Aerie
transaction may not be satisfied or waived, including that a
governmental entity may prohibit, delay or refuse to grant approval
for the consummation of the transaction; transaction costs of the
Aerie transaction; our ability to execute and achieve the expected
benefits of our transformation program; the impact of a disruption
in our global supply chain or important facilities; the effect of
the COVID-19 pandemic as well as other viral or disease outbreaks;
global and regional economic, financial, legal, tax, political and
social change; Russia’s war on Ukraine and the resulting global
response; the commercial success of our products and our ability to
maintain and strengthen our position in our markets; the success of
our research and development efforts, including our ability to
innovate to compete effectively; pricing pressure from changes in
third party payor coverage and reimbursement methodologies; ongoing
industry consolidation; our ability to properly educate and train
healthcare providers on our products; the impact of unauthorized
importation of our products from countries with lower prices to
countries with higher prices; our reliance on outsourcing key
business functions; changes in inventory levels or buying patterns
of our customers; our ability to attract and retain qualified
personnel; our ability to service our debt obligations; the need
for additional financing through the issuance of debt or equity;
our ability to protect our intellectual property; the effects of
litigation, including product liability lawsuits and governmental
investigations; our ability to comply with all laws to which we may
be subject; effect of product recalls or voluntary market
withdrawals; the implementation of our enterprise resource planning
system; the accuracy of our accounting estimates and assumptions,
including pension and other post-employment benefit plan
obligations and the carrying value of intangible assets; the
ability to obtain regulatory clearance and approval of our products
as well as compliance with any post-approval obligations, including
quality control of our manufacturing; legislative, tax 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; our ability to manage
environmental, social and governance matters to the satisfaction of
our many stakeholders, some of which may have competing interests;
the impact of being listed on two stock exchanges; the ability to
declare and pay dividends; the different rights afforded to our
shareholders as a Swiss corporation compared to a U.S. corporation;
and the effect of maintaining or losing our foreign private issuer
status under U.S. securities laws.
Additional factors are discussed in our filings with the United
States Securities and Exchange Commission, including our 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 in this press release speak only as of the date of its
filing, and we assume no obligation to update forward-looking
statements as a result of new information, future events or
otherwise.
Intellectual Property
This report may contain references to our proprietary
intellectual property. All product names appearing in italics or
ALL CAPS are trademarks owned by or licensed to Alcon Inc. Product
names identified by a "®" or a "™" are trademarks that are not
owned by or licensed to Alcon or its subsidiaries and are the
property of their respective owners.
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, free cash flow, and net (debt)/liquidity.
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
supplemental non-IFRS measures are presented solely to permit
investors to more fully understand how Alcon management assesses
underlying performance. These supplemental non-IFRS measures are
not, and should not be viewed as, a substitute for IFRS
measures.
Core results
Alcon core results, including core operating income and core net
income, exclude all amortization and impairment charges of
intangible assets, excluding software, net gains and losses on fund
investments and equity securities valued at fair value through
profit and loss ("FVPL"), fair value adjustments of financial
assets in the form of options to acquire a company carried at FVPL,
obligations related to product recalls, and certain acquisition
related items. The following items that exceed a threshold of $10
million and are deemed exceptional are also excluded from core
results: integration and divestment related income and expenses,
divestment gains and losses, restructuring charges/releases and
related items, legal related items, gains/losses on early
extinguishment of debt or debt modifications, past service costs
for post-employment benefit plans, impairments of property, plant
and equipment and software, as well as income and expense items
that management deems exceptional and that are or are expected to
accumulate within the year to be over a $10 million threshold.
Taxes on the adjustments between IFRS and core results take into
account, for each individual item included in the adjustment, the
tax rate that will finally be applicable to the item based on the
jurisdiction where the adjustment will finally have a tax impact.
Generally, this results in amortization and impairment of
intangible assets and acquisition-related restructuring and
integration items having a full tax impact. There is usually a tax
impact on other items, although this is not always the case for
items arising from legal settlements in certain jurisdictions.
Alcon believes that investor understanding of its performance is
enhanced by disclosing core measures of performance because, since
they exclude items that can vary significantly from period to
period, the core measures enable a helpful comparison of business
performance across periods. For this same reason, Alcon uses these
core measures in addition to IFRS and other measures as important
factors in assessing its performance.
A limitation of the core measures is that they provide a view of
Alcon operations without including all events during a period, such
as the effects of an acquisition, divestment, or
amortization/impairments of purchased intangible assets and
restructurings.
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 information about
changes in our net sales and various values relating to operating
and net income that are adjusted for such foreign currency
effects.
Constant currency calculations have the goal of eliminating two
exchange rate effects so that an estimate can be made of underlying
changes in the Consolidated Income Statement excluding:
- the impact of translating the income statements of consolidated
entities from their non-US dollar functional currencies to the US
dollar; and
- the impact of exchange rate movements on the major transactions
of consolidated entities performed in currencies other than their
functional currency.
Alcon calculates constant currency measures by translating the
current year's foreign currency values for sales and other income
statement items into US dollars, using the average exchange rates
from the historical comparative period and comparing them to the
values from the historical comparative period in US dollars.
Free cash flow
Alcon defines free cash flow as net cash flows from operating
activities less cash flow associated with the purchase or sale of
property, plant and equipment. Free cash flow is presented as
additional information because Alcon management believes it is a
useful supplemental indicator of Alcon's ability to operate without
reliance on additional borrowing or use of existing cash. Free cash
flow is not intended to be a substitute measure for net cash flows
from operating activities as determined under IFRS.
Net (debt)/liquidity
Alcon defines net (debt)/liquidity as current and non-current
financial debt less cash and cash equivalents, current investments
and derivative financial instruments. Net (debt)/liquidity is
presented as additional information because management believes it
is a useful supplemental indicator of Alcon's ability to pay
dividends, to meet financial commitments and to invest in new
strategic opportunities, including strengthening its balance
sheet.
Growth rate and margin
calculations
For ease of understanding, Alcon uses a sign convention for its
growth rates such that a reduction in operating expenses or losses
compared to the prior year is shown as a positive growth.
Gross margins, operating income/(loss) margins and core
operating income margins are calculated based upon net sales to
third parties unless otherwise noted.
Reconciliation of guidance for
forward-looking non-IFRS measures
The forward-looking guidance included in this press release
cannot be reconciled to the comparable IFRS measures without
unreasonable efforts, because we are not able to predict with
reasonable certainty the ultimate amount or nature of exceptional
items in the fiscal year. These items are uncertain, depend on many
factors and could have a material impact on our IFRS results for
the guidance period.
Financial tables
Net sales by region
Three months ended September
30
Nine months ended September
30
($ millions unless indicated
otherwise)
2022
2021
2022
2021
United States
979
46
%
939
45
%
2,908
45
%
2,732
45
%
International
1,145
54
%
1,145
55
%
3,591
55
%
3,356
55
%
Net sales to third parties
2,124
100
%
2,084
100
%
6,499
100
%
6,088
100
%
Consolidated Income Statement (unaudited)
Three months ended September
30
Nine months ended September
30
($ millions except earnings per share)
2022
2021
2022
2021
Net sales to third parties
2,124
2,084
6,499
6,088
Other revenues
16
18
47
54
Net sales and other revenues
2,140
2,102
6,546
6,142
Cost of net sales
(958
)
(892
)
(2,924
)
(2,647
)
Cost of other revenues
(16
)
(15
)
(44
)
(49
)
Gross profit
1,166
1,195
3,578
3,446
Selling, general & administration
(762
)
(779
)
(2,306
)
(2,263
)
Research & development
(159
)
(318
)
(506
)
(662
)
Other income
5
4
17
18
Other expense
(45
)
(82
)
(132
)
(141
)
Operating income
205
20
651
398
Interest expense
(34
)
(31
)
(94
)
(92
)
Other financial income & expense
(24
)
(12
)
(63
)
(29
)
Income/(loss) before taxes
147
(23
)
494
277
Taxes
(31
)
25
(62
)
(40
)
Net income
116
2
432
237
Earnings per share ($)
Basic
0.24
0.00
0.88
0.48
Diluted
0.23
0.00
0.87
0.48
Weighted average number of shares
outstanding (millions)
Basic
491.7
490.1
491.4
489.9
Diluted
494.7
493.8
494.3
493.2
Balance sheet highlights
($ millions)
September 30, 2022
December 31, 2021
Cash and cash equivalents
1,177
1,575
Current financial debts
83
114
Non-current financial debts
3,853
3,966
Free cash flow
The following is a summary of free cash flow for the nine months
ended September 30, 2022 and 2021, together with a reconciliation
to net cash flows from operating activities, the most directly
comparable IFRS measure:
Nine months ended September
30
($ millions)
2022
2021
Net cash flows from operating
activities
872
958
Purchase of property, plant &
equipment
(397)
(380)
Free cash flow
475
578
Net (debt)/liquidity
($ millions)
At September 30, 2022
Current financial debt
(83
)
Non-current financial debt
(3,853
)
Total financial debt
(3,936
)
Less liquidity:
Cash and cash equivalents
1,177
Derivative financial instruments
18
Total liquidity
1,195
Net (debt)
(2,741
)
Reconciliation of IFRS results to core results
Three months ended September 30, 2022
($ millions except earnings per share)
IFRS results
Amortization of certain
intangible assets(1)
Transformation
costs(4)
Other items(6)
Core results
Gross profit
1,166
142
—
2
1,310
Selling, general & administration
(762
)
—
—
—
(762
)
Research & development
(159
)
3
—
(16
)
(172
)
Other income
5
—
—
—
5
Other expense
(45
)
—
17
12
(16
)
Operating income
205
145
17
(2
)
365
Income before taxes
147
145
17
(2
)
307
Taxes(7)
(31
)
(24
)
(2
)
(2
)
(59
)
Net income
116
121
15
(4
)
248
Basic earnings per share ($)
0.24
0.50
Diluted earnings per share ($)
0.23
0.50
Basic - weighted average shares
outstanding (millions)(8)
491.7
491.7
Diluted - weighted average shares
outstanding (millions)(8)
494.7
494.7
Refer to the associated explanatory footnotes at the end of the
'Reconciliation of IFRS results to core results' tables.
Three months ended September 30, 2021
($ millions except earnings per share)
IFRS results
Amortization of certain
intangible assets(1)
Impairments (2)
Separation costs(3)
Transformation
costs(4)
Legal items(5)
Other items(6)
Core results
Gross profit
1,195
133
—
—
—
—
(1
)
1,327
Selling, general & administration
(779
)
—
—
3
—
—
—
(776
)
Research & development
(318
)
5
178
—
—
—
(39
)
(174
)
Other income
4
—
—
—
—
—
—
4
Other expense
(82
)
—
—
4
14
50
2
(12
)
Operating income
20
138
178
7
14
50
(38
)
369
(Loss)/income before taxes
(23
)
138
178
7
14
50
(38
)
326
Taxes(7)
25
(24
)
(41
)
—
(3
)
(12
)
(2
)
(57
)
Net income
2
114
137
7
11
38
(40
)
269
Basic earnings per share ($)
0.00
0.55
Diluted earnings per share ($)
0.00
0.54
Basic - weighted average shares
outstanding (millions)(8)
490.1
490.1
Diluted - weighted average shares
outstanding (millions)(8)
493.8
493.8
Refer to the associated explanatory footnotes at the end of the
'Reconciliation of IFRS results to core results' tables.
Nine months ended September 30, 2022
($ millions except earnings per share)
IFRS results
Amortization of certain
intangible assets(1)
Impairments(2)
Transformation
costs(4)
Legal items(5)
Other items(6)
Core results
Gross profit
3,578
423
59
—
—
(1
)
4,059
Selling, general & administration
(2,306
)
—
—
—
—
—
(2,306
)
Research & development
(506
)
14
2
—
—
(16
)
(506
)
Other income
17
—
—
—
—
—
17
Other expense
(132
)
—
—
41
20
25
(46
)
Operating income
651
437
61
41
20
8
1,218
Income before taxes
494
437
61
41
20
8
1,061
Taxes(7)
(62
)
(73
)
(14
)
(6
)
(5
)
(2
)
(162
)
Net income
432
364
47
35
15
6
899
Basic earnings per share ($)
0.88
1.83
Diluted earnings per share ($)
0.87
1.82
Basic - weighted average shares
outstanding (millions)(8)
491.4
491.4
Diluted - weighted average shares
outstanding (millions)(8)
494.3
494.3
Refer to the associated explanatory footnotes at the end of the
'Reconciliation of IFRS results to core results' tables.
Nine months ended September 30, 2021
($ millions except earnings per share)
IFRS results
Amortization of certain
intangible assets(1)
Impairments(2)
Separation costs(3)
Transformation
costs(4)
Legal items(5)
Other items(6)
Core results
Gross profit
3,446
386
45
—
—
—
(1
)
3,876
Selling, general & administration
(2,263
)
—
—
12
—
—
—
(2,251
)
Research & development
(662
)
5
178
—
—
—
(31
)
(510
)
Other income
18
—
—
—
—
—
(1
)
17
Other expense
(141
)
—
—
11
40
50
3
(37
)
Operating income
398
391
223
23
40
50
(30
)
1,095
Income before taxes
277
391
223
23
40
50
(30
)
974
Taxes(7)
(40
)
(70
)
(51
)
(4
)
(8
)
(12
)
(1
)
(186
)
Net income
237
321
172
19
32
38
(31
)
788
Basic earnings per share ($)
0.48
1.61
Diluted earnings per share ($)
0.48
1.60
Basic - weighted average shares
outstanding (millions)(8)
489.9
489.9
Diluted - weighted average shares
outstanding (millions)(8)
493.2
493.2
Refer to the associated explanatory footnotes at the end of the
'Reconciliation of IFRS results to core results' tables.
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, primarily related to IT
and third party consulting fees, following completion of the
spin-off.
(4)
Transformation costs, primarily related to
restructuring and third party consulting fees, for the multi-year
transformation program.
(5)
For the nine months ended September 30,
2022, includes a legal settlement.
For the three and nine months ended
September 30, 2021, includes an increase in provisions for legal
matters.
(6)
For the three months ended September 30,
2022, Gross profit includes the amortization of inventory fair
value adjustments related to a recent acquisition. Research &
development includes fair value adjustments to contingent
consideration liabilities. Other expense includes acquisition and
integration related expenses and fair value adjustments of
financial assets.
For the three months ended September 30,
2021, Gross profit includes fair value adjustments to contingent
consideration liabilities. Research & development includes fair
value adjustments to contingent consideration liabilities of $41
million, partially offset by $2 million for the amortization of
option rights. Other expense includes fair value adjustments of
financial assets.
For the nine months ended September 30,
2022, Gross profit includes fair value adjustments to contingent
consideration liabilities, partially offset by the amortization of
inventory fair value adjustments related to a recent acquisition.
Research & development includes fair value adjustments to
contingent consideration liabilities. Other expense includes
acquisition and integration related expenses and fair value
adjustments of financial assets.
For the nine months ended September 30,
2021, Gross profit includes fair value adjustments to contingent
consideration liabilities. Research & development includes fair
value adjustments to contingent consideration liabilities of $41
million, partially offset by $10 million for the amortization of
option rights. Other income and Other expense include fair value
adjustments of financial assets.
(7)
For the three months ended September 30,
2022, tax associated with operating income core adjustments of $160
million totaled $28 million with an average tax rate of 17.5%.
For the three months ended September 30,
2021, total tax adjustments of $82 million include tax associated
with operating income core adjustments and discrete tax items. Tax
associated with operating income core adjustments of $349 million
totaled $80 million with an average tax rate of 22.9%.
For the nine months ended September 30,
2022, total tax adjustments of $100 million include tax associated
with operating income core adjustments, partially offset by
discrete tax items. Tax associated with operating income core
adjustments of $567 million totaled $103 million with an average
tax rate of 18.2%.
For the nine months ended September 30,
2021, total tax adjustments of $146 million include tax associated
with operating income core adjustments of $697 million with an
average tax rate of 20.9%.
(8)
Core basic earnings per share is
calculated using the weighted-average shares of common stock
outstanding during the period. Core diluted earnings per share also
contemplate dilutive shares associated with unvested equity-based
awards as described in Note 4 to the Condensed Consolidated Interim
Financial Statements.
About Alcon
Alcon helps people see brilliantly. As the global leader in eye
care with a heritage spanning over 75 years, we offer the broadest
portfolio of products to enhance sight and improve people’s lives.
Our Surgical and Vision Care products touch the lives of more than
260 million people in over 140 countries each year living with
conditions like cataracts, glaucoma, retinal diseases and
refractive errors. Our more than 24,000 associates are enhancing
the quality of life through innovative products, partnerships with
Eye Care Professionals and programs that advance access to quality
eye care. Learn more at www.alcon.com.
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version on businesswire.com: https://www.businesswire.com/news/home/20221111005410/en/
Investor Relations Daniel
Cravens Allen Trang + 41 589 112 110 (Geneva) + 1 817 615 2789
(Fort Worth) investor.relations@alcon.com
Media Relations Steven Smith
+ 41 589 112 111 (Geneva) + 1 817 551 8057 (Fort Worth)
globalmedia.relations@alcon.com
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