- Q4 2023 sales of $2.3 billion, up 8%, or 10% constant
currency(1) (cc)
- Q4 2023 diluted EPS of $0.86, compared to a loss in the
prior year(3); core diluted EPS(2) of $0.70 up 67%, or 78%
cc
- FY 2023 sales of $9.4 billion, up 8%, or 10% cc
- FY 2023 diluted EPS of $1.96, up 188%; core diluted EPS of
$2.74, up 22%, or 33% cc
- FY 2024 outlook: 6% to 8% cc sales growth, 13% to 16% cc
core diluted EPS growth
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 twelve months ended
December 31, 2023. For the fourth quarter of 2023, sales were $2.3
billion, an increase of 8% on a reported basis and 10% on a
constant currency basis(1), as compared to the same quarter of the
previous year. Alcon reported diluted earnings per share of $0.86
and core diluted earnings per share(2) of $0.70 in the fourth
quarter of 2023.
David J. Endicott, Alcon's Chief Executive Officer, said, "2023
was an excellent year for Alcon, and I'm proud of what our team
accomplished. We delivered solid top-line growth in both franchises
on the back of healthy markets. We also grew earnings and expanded
margins, all while successfully completing our transformation
program and advancing our product pipeline."
Mr. Endicott continued, "As we look forward into 2024, we are
excited about completing development on several innovative products
that will continue to support our customers and their patients. As
a result, we expect to continue to outpace market growth, deliver
operating leverage and create long-term shareholder value."
Fourth quarter and full year 2023 key figures
Three months ended December
31
Twelve months ended December
31
2023
2022
2023
2022
Net sales ($ millions)
2,332
2,155
9,370
8,654
Operating margin (%)
8.9%
1.0%
11.1%
7.8%
Diluted earnings/(loss) per share ($)
0.86
(0.20)
1.96
0.68
Core results (non-IFRS
measure)(2)
Core operating margin (%)
18.9%
16.4%
19.7%
18.2%
Core diluted earnings per share ($)
0.70
0.42
2.74
2.24
(1)
Constant currency is a non-IFRS measure.
Refer to the 'Footnotes' section for additional information.
(2)
Core results, such as core operating
income, core operating margin and core diluted EPS, are non-IFRS
measures. Refer to the 'Footnotes' section for additional
information.
(3)
Q4 2022 included legal settlement costs
and the tax impact of an Advanced Pricing Agreement. Q4 2023
includes a tax benefit of $263M associated with a long-term
agreement with Swiss tax authorities for deductibility of a
statutory expense. Refer to Alcon's 2023 Annual Report or Q4 2023
Interim Financial Report for additional information.
Fourth quarter and full year 2023 results
Sales for the fourth quarter of 2023 were $2.3 billion, an
increase of 8% on a reported basis and 10% on a constant currency
basis, compared to the fourth quarter of 2022. Sales for the full
year 2023 were $9.4 billion, an increase of 8% on a reported basis
and 10% on a constant currency basis, compared to the full year
2022.
The following table highlights net sales by segment for the
fourth quarter and full year 2023:
Three months ended December
31
Change %
Twelve months ended December
31
Change %
($ millions unless indicated
otherwise)
2023
2022
$
cc(1)
(non-IFRS
measure)
2023
2022
$
cc(1)
(non-IFRS
measure)
Surgical
Implantables
438
434
1
5
1,703
1,725
(1
)
2
Consumables
688
636
8
9
2,719
2,499
9
11
Equipment/other
226
204
11
14
892
821
9
12
Total Surgical
1,352
1,274
6
8
5,314
5,045
5
8
Vision Care
Contact lenses
579
530
9
10
2,400
2,192
9
11
Ocular health
401
351
14
17
1,656
1,417
17
19
Total Vision Care
980
881
11
13
4,056
3,609
12
14
Net sales to third parties
2,332
2,155
8
10
9,370
8,654
8
10
Surgical growth driven by international markets
For the fourth quarter of 2023, Surgical net sales, which
include implantables, consumables and equipment/other, were $1.4
billion, an increase of 6% on a reported basis and 8% on a constant
currency basis versus the fourth quarter of 2022.
- Implantables net sales were $438 million, an increase of 1%,
led by demand for advanced technology intraocular lenses in
international markets, partially offset by unfavorable currency
impacts of 4%. Implantables net sales increased 5% constant
currency.
- Consumables net sales were $688 million, an increase of 8%,
reflecting demand for cataract and vitreoretinal consumables,
particularly in international markets, and price increases. Growth
was partially offset by unfavorable currency impacts of 1%.
Consumables net sales increased 9% constant currency.
- Equipment/other net sales were $226 million, an increase of
11%, driven by demand for cataract and vitreoretinal equipment in
international markets and higher service revenues. Growth was
partially offset by unfavorable currency impacts of 3%.
Equipment/other net sales increased 14% constant currency.
For the full year 2023, Surgical net sales were $5.3 billion, an
increase of 5%. Excluding unfavorable currency impacts of 3%,
Surgical net sales increased 8% constant currency.
Double-digit Vision Care growth reflects strength across the
franchise, including acquired products, and pricing
For the fourth quarter of 2023, Vision Care net sales, which
include contact lenses and ocular health, were $980 million, an
increase of 11% on a reported basis and 13% on a constant currency
basis, versus the fourth quarter of 2022. Vision Care net sales
included 2 percentage points of contribution from products acquired
in 2022.
- Contact lenses net sales were $579 million, an increase of 9%,
driven by product innovation, including sphere and toric product
launches, and price increases. Growth was partially offset by
declines in legacy lenses and unfavorable currency impacts of 1%.
Contact lenses net sales increased 10% constant currency.
- Ocular health net sales were $401 million, an increase of 14%,
primarily driven by the portfolio of eye drops, including acquired
ophthalmic pharmaceutical products, price increases and recovery
from supply chain challenges in contact lens care. Growth was
partially offset by unfavorable currency impacts of 3%. Ocular
health net sales increased 17% constant currency, including 4
percentage points from products acquired in 2022.
For the full year 2023, Vision Care net sales were $4.1 billion,
an increase of 12%, including 4 percentage points from products
acquired in 2022. Excluding unfavorable currency impacts of 2%,
Vision Care net sales increased 14% constant currency.
Operating income
Fourth quarter 2023 operating income was $208 million, compared
to $21 million in the prior year period. Operating margin increased
7.9 percentage points, reflecting improved underlying operating
leverage from higher sales and manufacturing efficiencies, lower
acquisition and integration related expenses and lower
transformation costs. The prior year period was impacted by $70
million of legal settlement costs. Operating margin benefits were
partially offset by increased inflationary impacts and a negative
1.4 percentage point impact from currency. Operating margin
increased 9.3 percentage points on a constant currency basis.
Adjustments to arrive at core operating income(2) in the current
year period were $232 million, mainly due to $167 million of
amortization, $57 million of transformation costs and $21 million
of integration related expenses. Excluding these and other
adjustments, fourth quarter 2023 core operating income was $440
million.
Fourth quarter 2023 core operating margin was 18.9%. Core
operating margin increased 2.5 percentage points, reflecting
improved underlying operating leverage from higher sales and
manufacturing efficiencies. Core operating margin benefits were
partially offset by increased inflationary impacts and a negative
1.1 percentage point impact from currency. Core operating margin
increased 3.6 percentage points on a constant currency basis.
Operating income for the full year 2023 was $1.0 billion and
operating margin was 11.1%, which increased 3.3 percentage points
on a reported basis and 4.7 percentage points on a constant
currency basis. Adjustments to arrive at core operating income in
the current year period were $810 million, mainly due to $675
million of amortization, $139 million of transformation costs and
$48 million of integration related expenses, partially offset by a
$58 million benefit from the release of a contingent liability
related to a recent acquisition. Excluding these and other
adjustments, core operating income for the full year 2023 was $1.8
billion.
Core operating margin for the full year 2023 was 19.7%, an
increase of 1.5 percentage points. Core operating margin increased
2.8 percentage points on a constant currency basis.
Diluted earnings per share (EPS)
Fourth quarter 2023 diluted earnings per share were $0.86,
compared to a loss in the prior year period. Core diluted earnings
per share of $0.70 increased 67%, or 78% on a constant currency
basis.
Diluted earnings per share for the full year 2023 were $1.96, an
increase of 188%, or 241% on a constant currency basis. Core
diluted earnings per share of $2.74 increased 22%, or 33% on a
constant currency basis.
Proposed dividend
The Company's Board of Directors proposed a dividend of CHF 0.24
per share, based on 2023 financial results. The Company's
shareholders will vote on this proposal at the 2024 Annual General
Meeting on May 8, 2024.
Balance sheet and cash flow highlights
The Company ended 2023 with a cash position of $1.1 billion.
Cash flows from operating activities for 2023 totaled $1.4 billion,
compared to $1.2 billion in the prior year. The current year
includes increased collections associated with higher sales and
lower associate short-term incentive payments, which generally
occur in the first quarter. Cash outflows in the current year
include higher payments for revenue deductions, transformation and
other operating expenditures, including increased investment in
research and development. The current year cash outflows also
include a legal settlement, increased taxes paid due to the timing
of payments, higher interest payments associated with increased
financial debt outstanding and a negative impact of foreign
currency rates on operating results. Both periods were impacted by
changes in net working capital.
Free cash flow(4), a non-IFRS measure, was an inflow of $730
million in 2023, compared to $581 million in the previous year. The
improvement in free cash flow was driven by increased cash flows
from operations, partially offset by increased purchases of
property, plant and equipment.
(4)
Free cash flow is a non-IFRS measure.
Refer to the 'Footnotes' section for additional information.
2024 outlook
The Company provided its 2024 outlook as per the table
below.
2024 outlook(5)
February
Net sales (USD)
$9.9 to $10.1 billion
Change vs. prior year (cc)(1)
(non-IFRS measure)
+6% to +8%
Core operating margin(2)
(non-IFRS measure)
20.5% to 21.5%
Interest expense and
Other financial income & expense
$190 to $210 million
Core effective tax rate(6)
(non-IFRS measure)
~20%
Core diluted EPS(2)
(non-IFRS measure)
$3.00 to $3.10
Change vs. prior year (cc)(1)
(non-IFRS measure)
+13% to +16%
This outlook assumes the following:
- Aggregated markets grow in line with historical averages
(mid-single digits)
- Exchange rates as of the end of January 2024 prevail through
year-end;
- Approximately 498 million weighted-averaged diluted
shares.
(5)
The forward-looking guidance included in
this press release cannot be reconciled to the comparable IFRS
measures without unreasonable effort, because we are not able to
predict with reasonable certainty the ultimate amount or nature of
exceptional items in the fiscal year. Refer to the 'Footnotes'
section for additional information.
(6)
Core effective tax rate, a non-IFRS measure, is the applicable
annual tax rate on core taxable income. Refer to the 'Footnotes'
section for additional information.
Webcast and Conference Call Instructions
The Company will host a conference call on February 28, 2024 at
8:00 a.m. Eastern Time / 2:00 p.m. Central European Time to discuss
its fourth quarter 2023 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.
Today, Alcon will issue its 2023 Annual Report, which will be
available on
https://investor.alcon.com/financials/annual-reports/default.aspx.
Alcon will also file its 2023 Annual Report on Form 20-F with the
US Securities and Exchange Commission today, and will post this
document on
https://investor.alcon.com/financials/sec-filings/default.aspx.
Alcon shareholders may receive a hard copy of either of these
documents, each of which contains our complete audited financial
statements, free of charge, upon request.
The Company's 2023 Annual Report, interim financial report and
supplemental presentation materials can be found online through
Alcon's Investor Relations website, or by clicking on the link:
https://investor.alcon.com/news-and-events/events-and-presentations/event-details/2024/Alcons-Fourth-Quarter-2023-Earnings-Conference-Call-2024-PHnyRqbcfB/default.aspx
Footnotes (pages 1-5)
(1)
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.
(2)
Core results, such as core operating income, 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.
(3)
Q4 2022 included legal settlement costs
and the tax impact of an Advanced Pricing Agreement. Q4 2023
includes a tax benefit of $263M associated with a long-term
agreement with Swiss tax authorities for deductibility of a
statutory expense. Refer to Alcon's 2023 Annual Report or Q4 2023
Interim Financial Report for additional information.
(4)
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.
(5)
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. Refer to the section
'Non-IFRS measures as defined by the Company' for more
information.
(6)
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 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 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 market growth assumptions, our
social impact and sustainability plans, targets, goals and
expectations, and generally, our expectations concerning our future
performance.
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,
particularly with the increased use of artificial intelligence; the
impact of a disruption in our global supply chain or important
facilities, particularly when we single-source or rely on limited
sources of supply; our ability to forecast sales demand and manage
our inventory levels and the changing buying patterns of our
customers; our ability to manage social impact and sustainability
matters; our reliance on outsourcing key business functions; global
and regional economic, financial, monetary, legal, tax, political
and social change; our success in completing and integrating
strategic acquisitions; the success of our research and development
efforts, including our ability to innovate to compete effectively;
our ability to comply with the US Foreign Corrupt Practices Act of
1977 and other applicable anti-corruption laws; pricing pressure
from changes in third party payor coverage and reimbursement
methodologies; our ability to properly educate and train healthcare
providers on our products; our ability to protect our intellectual
property; our ability to comply with all laws to which we may be
subject; 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; the
effect of product recalls or voluntary market withdrawals; 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 impact of unauthorized
importation of our products from countries with lower prices to
countries with higher prices; our ability to service our debt
obligations; the need for additional financing through the issuance
of debt or equity; the effects of litigation, including product
liability lawsuits and governmental investigations; supply
constraints and increases in the cost of energy; our ability to
attract and retain qualified personnel; legislative, tax and
regulatory reform; 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 US corporation; the effect of maintaining or losing our
foreign private issuer status under US securities laws; and the
ability to enforce US judgments against Swiss corporations.
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 document 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 currency and free cash flow.
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 currency
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.
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 December
31
Twelve months ended December
31
($ millions unless indicated
otherwise)
2023
2022
2023
2022
United States
1,067
46%
989
46%
4,312
46%
3,897
45%
International
1,265
54%
1,166
54%
5,058
54%
4,757
55%
Net sales to third parties
2,332
100%
2,155
100%
9,370
100%
8,654
100%
Consolidated Income Statement (unaudited)
Three months ended December
31
Twelve months ended December
31
($ millions except earnings/(loss) per
share)
2023
2022
2023
2022
Net sales to third parties
2,332
2,155
9,370
8,654
Other revenues
20
16
85
63
Net sales and other revenues
2,352
2,171
9,455
8,717
Cost of net sales
(1,049
)
(986
)
(4,141
)
(3,910
)
Cost of other revenues
(13
)
(15
)
(67
)
(59
)
Gross profit
1,290
1,170
5,247
4,748
Selling, general & administration
(794
)
(762
)
(3,209
)
(3,068
)
Research & development
(208
)
(196
)
(828
)
(702
)
Other income
6
19
80
36
Other expense
(86
)
(210
)
(251
)
(342
)
Operating income
208
21
1,039
672
Interest expense
(47
)
(40
)
(189
)
(134
)
Other financial income & expense
7
(12
)
(18
)
(75
)
Income/(loss) before taxes
168
(31
)
832
463
Taxes
259
(66
)
142
(128
)
Net income/(loss)
427
(97
)
974
335
Earnings/(loss) per share ($)
Basic
0.87
(0.20
)
1.98
0.68
Diluted
0.86
(0.20
)
1.96
0.68
Weighted average number of shares
outstanding (millions)
Basic
493.3
491.8
493.0
491.4
Diluted
496.4
491.8
496.5
494.4
Balance sheet highlights
($ millions)
December 31, 2023
December 31, 2022
Cash and cash equivalents
1,094
980
Current financial debts
145
107
Non-current financial debts
4,594
4,541
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:
Twelve months ended December
31
($ millions)
2023
2022
Net cash flows from operating
activities
1,388
1,217
Purchase of property, plant &
equipment
(658
)
(636
)
Free cash flow
730
581
Reconciliation of IFRS results to core results (non-IFRS
measure)
Three months ended December 31, 2023
($ millions except earnings per share)
IFRS
results
Amortization of
certain
intangible
assets(1)
Transformation
costs(3)
Other
items(5)
Core
results (non-
IFRS
measure)
Gross profit
1,290
164
—
(6
)
1,448
Operating income
208
167
57
8
440
Income before taxes
168
167
57
8
400
Taxes(6)
259
(30
)
(12
)
(272
)
(55
)
Net income
427
137
45
(264
)
345
Basic earnings per share ($)
0.87
0.70
Diluted earnings per share ($)
0.86
0.70
Basic - weighted average shares
outstanding (millions)(7)
493.3
493.3
Diluted - weighted average shares
outstanding (millions)(7)
496.4
496.4
Refer to the associated explanatory footnotes at the end of the
'Reconciliation of IFRS results to core results (non-IFRS measure)'
tables.
Three months ended December 31, 2022
($ millions except (loss)/earnings per
share)
IFRS
results
Amortization of
certain
intangible
assets(1)
Impairments(2)
Transformation
costs(3)
Legal
items(4)
Other
items(5)
Core
results
(non-IFRS
measure)
Gross profit
1,170
149
—
—
—
3
1,322
Operating income
21
151
1
78
70
32
353
(Loss)/income before taxes
(31
)
151
1
78
70
32
301
Taxes(6)
(66
)
(26
)
—
(14
)
(17
)
31
(92
)
Net (loss)/income
(97
)
125
1
64
53
63
209
Basic (loss)/earnings per share ($)
(0.20
)
0.42
Diluted (loss)/earnings per share ($)
(0.20
)
0.42
Basic - weighted average shares
outstanding (millions)(7)
491.8
491.8
Diluted - weighted average shares
outstanding (millions)(7)
491.8
495.0
Refer to the associated explanatory footnotes at the end of the
'Reconciliation of IFRS results to core results (non-IFRS measure)'
tables.
Twelve months ended December 31, 2023
($ millions except earnings per share)
IFRS
results
Amortization of
certain
intangible
assets(1)
Transformation
costs(3)
Other
items(5)
Core results
(non-IFRS
measure)
Gross profit
5,247
663
—
7
5,917
Operating income
1,039
675
139
(4
)
1,849
Income before taxes
832
675
139
(4
)
1,642
Taxes(6)
142
(121
)
(26
)
(277
)
(282
)
Net income
974
554
113
(281
)
1,360
Basic earnings per share ($)
1.98
2.76
Diluted earnings per share ($)
1.96
2.74
Basic - weighted average shares
outstanding (millions)(7)
493.0
493.0
Diluted - weighted average shares
outstanding (millions)(7)
496.5
496.5
Refer to the associated explanatory footnotes at the end of the
'Reconciliation of IFRS results to core results (non-IFRS measure)'
tables.
Twelve months ended December 31, 2022
($ millions except earnings per share)
IFRS
results
Amortization
of certain
intangible
assets(1)
Impairments(2)
Transformation
costs(3)
Legal
items(4)
Other
items(5)
Core results
(non-IFRS
measure)
Gross profit
4,748
572
59
—
—
2
5,381
Operating income
672
588
62
119
90
40
1,571
Income before taxes
463
588
62
119
90
40
1,362
Taxes(6)
(128
)
(99
)
(14
)
(20
)
(22
)
29
(254
)
Net income
335
489
48
99
68
69
1,108
Basic earnings per share ($)
0.68
2.25
Diluted earnings per share ($)
0.68
2.24
Basic - weighted average shares
outstanding (millions)(7)
491.4
491.4
Diluted - weighted average shares
outstanding (millions)(7)
494.4
494.4
Refer to the associated explanatory footnotes at the end of the
'Reconciliation of IFRS results to core results (non-IFRS measure)'
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)
Transformation costs, primarily related to
restructuring and third party consulting fees, for the multi-year
transformation program. The transformation program was completed in
the fourth quarter of 2023.
(4)
Includes legal settlement costs.
(5)
For the three months ended December 31, 2023, 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. Operating income also
includes integration related expenses for a recent acquisition and
the amortization of option rights, partially offset by fair value
adjustments of financial assets. For the three months ended
December 31, 2022, Gross profit includes the amortization of
inventory fair value adjustments related to recent acquisitions.
Operating income also includes acquisition and integration related
expenses and fair value adjustments of financial assets. For the
twelve months ended December 31, 2023, Gross profit includes the
amortization of inventory fair value adjustments related to a
recent acquisition, partially offset by fair value adjustments to
contingent consideration liabilities. Operating income also
includes the release of a contingent liability related to a recent
acquisition and fair value adjustments to contingent consideration
liabilities, partially offset by integration related expenses for a
recent acquisition, the amortization of option rights and fair
value adjustments of financial assets. For the twelve months ended
December 31, 2022, Gross profit includes the amortization of
inventory fair value adjustments related to recent acquisitions,
partially offset by fair value adjustments to contingent
consideration liabilities. Operating income also includes
acquisition and integration related expenses, partially offset by
fair value adjustments to contingent consideration liabilities and
fair value adjustments of financial assets.
(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. Tax
associated with operating income core adjustments of $232 million
totaled $45 million with an average tax rate of 19.4%. Core tax
adjustments for discrete tax items totaled $269 million, primarily
due to a $263 million tax benefit associated with a long-term
agreement related to deductibility of a statutory expense in
Switzerland.
For the three months ended December 31,
2022, total tax adjustments of $26 million include tax associated
with operating income core adjustments, partially offset by a
discrete tax item. Tax associated with operating income core
adjustments of $332 million totaled $63 million with an average tax
rate of 19.0%. Core tax adjustments for discrete tax items totaled
$37 million related to the recognition of an Advanced Pricing
Agreement between US and Switzerland tax authorities for fiscal
years 2019 through 2021.
For the twelve months ended December 31,
2023, total tax adjustments of $424 million include tax associated
with operating income core adjustments and discrete tax items. Tax
associated with operating income core adjustments of $810 million
totaled $155 million with an average tax rate of 19.1%. Core tax
adjustments for discrete tax items totaled $269 million, primarily
due to a $263 million tax benefit associated with a long-term
agreement related to deductibility of a statutory expense in
Switzerland.
For the twelve months ended December 31,
2022, total tax adjustments of $126 million include tax associated
with operating income core adjustments, partially offset by
discrete tax items. Tax associated with operating income core
adjustments of $899 million totaled $166 million with an average
tax rate of 18.5%. Core tax adjustments for discrete tax items
totaled $40 million, primarily related to the recognition of an
Advanced Pricing Agreement between US and Switzerland tax
authorities for fiscal years 2019 through 2021.
(7)
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 5 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 people in
over 140 countries each year living with conditions like cataracts,
glaucoma, retinal diseases and refractive errors. Our more than
25,000 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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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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